This Bitcoin price metric just hit ‘oversold’ for only the 7th time in 8 years

A price gauge for Bitcoin (BTC) that made it “appear really inexpensive” around $56,000 is currently in unusual oversold territory.

Philip Swift, the owner of analytics site LookIntoBitcoin, returned to possibly optimistic signs emanating from Bitcoin’s Advanced NVT Signal in a tweet on Dec. 6.

Advanced NVT deflates in Bitcoin price rout

Using market capitalization and network volume, Advanced NVT determines if Bitcoin is overbought or oversold at a certain price point.

Swift predicted a recovery in late November when BTC/USD had already plummeted to $56,000.

Due to last Friday’s liquidation cascade, the measure has since proceeded to decrease in line with the spot price. However, the reappearance of “oversold” indications from NVT — something that has only happened six times since 2015 — might be a bonus.

“There is a lot of anxiety in the market right now, which makes me optimistic.” “There are a lot of clues that we’re getting close to a bottom,” he added.

“The Advanced NVT Signal considers the pricing of on-chain transactions. Only a few occasions has it been this oversold, and each time has resulted in a huge bounce.”

Trader to BTC buyers: Wait a week to “avoid chop”

However, the momentum of such a recovery may have already dissipated, with Bitcoin backtracking after gaining nearly 6% overnight to $51,500.

At the time of publication, $51,000 had been a focal point, despite strong signs from pundits that new downside might be on the way.

“Buy in the low to mid-forties. Pentoshi, a trader and analyst, cautioned Twitter users not to become stuck.