Bitcoin (BTC) Price Correction Sparks Speculation, Analyst Warns Against NVT Golden Cross Misinterpretation

The Bitcoin price correction from its recent all-time high has sparked speculation within the crypto community, with many questioning whether the bull run remains intact and what the next price move might be.

Bitcoin price pulled back from its recent all-time high, sparking speculation within the crypto community on whether the bull run remains intact and what the next price move might be.

BTC is currently trading at a price below the $95,000 mark, down by nearly 7% from its all-time high above $99,000 recorded on November 22.

BTC NVT Golden Cross Outlook

Amid the ongoing pullback in its price, a CryptoQuant analyst known by the pseudonym Darkfost shared insights on the market’s current state, focusing on a key on-chain metric: the NVT Golden Cross. This metric, which evaluates the relationship between market capitalization and transaction volume, recently turned positive.

Still, Darkfost warned against perceiving this change as outright positive. He said that while the NVT Golden Cross value stands presently at a low point not at risk, traders would have to monitor it to not let potential markets open up.

Notably, the NVT Golden Cross, which is a measure of whether Bitcoin’s market cap is running ahead of its transaction volume, is a leading indicator for market trends. According to Darkfost, if this metric approaches 2.2, this could indicate that the valuation of Bitcoin is in excess of its transactional utility.

In such cases, Darkfost said the market will experience a “reversion to the mean,” which indicates potential short-position opportunities. The CryptoQuant analyst went on to say:

This could mark the start of a ranging pattern, thereby setting up a conducive atmosphere to allow altcoins to thrive. Bitcoin, as of today, is at $93,196, and Bitcoin is down by 3.3% since yesterday. Analysts are coming out with their respective sources regarding what is happening with Bitcoin. For more detailed insights on Bitcoin’s future price trajectory, check out our expert Bitcoin Price Prediction.

The crypto market has seen immense volatility, with approximately 191,493 traders liquidated within the last 24 hours, amounting to a total of $571.80 million in liquidations, according to CoinGlass.

IntoTheBlock, one of the most well-known market intelligence platforms, has recently proposed a significant fundamental reason for Bitcoin’s correction.

According to a post published on X this morning, the platform revealed that “elevated funding rates,” which are “signs of excessively leveraged positions,” are among the factors that contribute to the BTC’s ongoing downtrend.

Bitcoin’s retrace can be attributed in part to elevated funding rates, signaling excessively leveraged positions.

The good news? Funding rates have largely normalized, suggesting the leverage flush may have run its course. pic.twitter.com/A2kJEk50uT

— IntoTheBlock (@intotheblock) November 26, 2024

As IntoTheBlock pointed out, “funding rates have largely normalized,” meaning the “leverage flush may have run its course.

Meanwhile, from a technical perspective, Bitcoin might be gearing up for a reversal. Renowned crypto analyst Ali recently took to his X account to reveal that the TD Sequential for BTC is now presenting a “buy signal.”

The TD Sequential presents a buy signal on the #Bitcoin $BTC hourly chart, while a bullish divergence forms against the RSI, which could help #BTC rebound to $95,000 – $96,000!

Join me in this trade by signing up to @coinexcom using my referral link https://t.co/73n8mW9Y5p. pic.twitter.com/lKozxI8JVP

— Ali (@ali_charts) November 26, 2024