Bitcoin faces potential local low in 2024 amid mixed signals

Bitcoin’s decline suggests a third “local low” in 2024, as a key metric for Bitcoin’s price shows potential for an increase. A new analysis from CryptoQuant on August 8 indicates a bullish trend in the network value to transaction golden cross (NVT-GC) indicator.

Bitcoin’s price is showing signs of cooling off, with warnings of another downturn in BTC/USD this week due to moving averages indicating a “death cross.”

Despite these concerns, other indicators are suggesting a possible rebound. The Network Value to Transaction Golden Cross (NVT-GC), a volatility gauge akin to Bollinger Bands, shows signs of a local bottom. This tool compares Bitcoin’s market cap to transaction values over time, and its Golden Cross version contrasts long-term and short-term NVT values.

Bitcoin’s NVT-GC points to a possible rebound despite cooling price

CryptoQuant’s contributor Burakkesmeci explains that when the NVT-GC rises above 2.2 (the red zone), it signals that Bitcoin’s price is overheating and approaching a local top. Conversely, a drop below -1.6 (the green zone) suggests the price is excessively cooling and hitting a local bottom. 

In 2024, three local bottom signals appeared, with previous instances on January 18 and July 12 leading to subsequent BTC price increases of 78% and 23%, respectively.

At this moment, we are in a local low area according to the NVT GC. Can the price go higher? Yes, but we should expect the short-term trend to shift back to the positive.

Burakkesmeci 

Bitcoin traders are losing faith in $60,000 support

According to TradingView, Bitcoin has been trading around $60,000 over the weekend. Despite some holding support levels, not all traders are convinced. 

Source: TradingView

Popular trader Crypto Tony predicts a potential drop to $58,300 before a reversal. 

At the same time, blockchain expert Elja Boom suggests a possible final retest of lows before a full recovery, drawing parallels with past BTC/USD price movements.

Mikybull Crypto and Rekt Capital are among the crypto enthusiasts predicting a BTC rally in the near future based on the asset’s historical performance. The former notes a similar correction in Q3 2023, which was later replaced by a fresh bull run.

Rekt Capital thinks the leading digital asset has yet to benefit from the BTC halving, which occurred in April of this year. 

The halving is an important event that occurs approximately every four years and slashes in half the miners’ rewards for validating new blocks on the BTC blockchain. Historically, the process has been followed by a massive resurgence for the primary cryptocurrency and the entire market. 

The analyst noted that the BTC price peaked more than 500 days after the halving in 2016 and the one in 2020.

If history repeats and the next Bull Market peak occurs 518-546 days after the halving… That would mean Bitcoin could peak in this cycle in mid-September or mid-October 2025.

Rekt Capital 

Concerns about the long-term viability of Bitcoin’s layer-2 scaling solutions

On August 2, Galaxy Research unveiled a study indicating that the majority of Bitcoin’s layer-2 scaling solutions might not be viable over the long term. Even though Bitcoin’s layer-2 solutions are widely used, Galaxy analyst Gabe Parker pointed out that the expenses, especially related to “rollups,” might present future difficulties. 

Parker explained that Bitcoin’s rollups need to earn sufficient income from transaction fees from users who are prepared to pay for the layer-2 network fees to thrive and succeed in the future.

Cryptopolitan reporting by Nellius Irene