Is the Bitcoin price now rising out of the bear market?

According to Michael Novogratz and others, the bottom of the bear market has been reached and the time is ripe for a bull market. But is that what the Bitcoin rate is currently giving us? The NVT ratio can help to estimate the end of a bear market.

The voices in favour of the Bitcoin share price are once again changing: fueled by concerns about a new economic crisis, some have spoken out in favour of Bitcoin, as the latest opinion poll shows. Michael Novogratz even announced the eagerly awaited ground and the end of the bear market. Others have conjured that September has always led to a rise in the Bitcoin price.

How much do the Bitcoin revolution last?

Bullish statements such as Charlie Shrem’s adieu to Bitcoin rates below $10,000 have not proved true as seen here In other articles we have looked critically and database driven at bullish Bitcoin revolution forecasts to estimate how likely or unlikely they are.

As for September as the Easter of the Bitcoin exchange rate, doubt is also called for. Not only have such approaches not always proven to be correct in the past, but the (already inadequate) statistics hardly provide such certainty:

Eight measurements are not really enough to justify a statement by the brand “September always leads to a bull market”. As the above chart compilation shows, not even the scarcity of data confirms such a claim.

The crypto equivalent to Bitcoin loophole

But when will the bear market for the Bitcoin loophole price be over? BTC-ECHO has almost regularly pointed out the moving average of the last 20 weeks, MA20. The simple rule of thumb applies: If the Bitcoin price is above the MA20 in the weekly chart for several weeks, one can again speak of a bull market. Another indicator can help to capture the current market sentiment and to articulate how far one is from a bull market. We are talking about the NVT ratio or the NVT ratio.

The NVT ratio is an invention of Willy Woo. Its basis is defined as the ratio between market capitalization and trading volume. It corresponds somewhat to the P/E ratio, the buy/sell ratio from the classic stock market. The lower this ratio is, the more undervalued the crypto currency is in terms of its use as a means of payment. The higher the ratio, the less the crypto currency is used in terms of valuation. It may be that this is the beginning of a sustainable adaptation wave, but, as the past has shown, it was connected with a bubble formation.

Using NVT and MA20 to estimate market sentiment from the Bitcoin price
The NVT ratio can be easily combined with the previous MA20 view in the weekly chart. The following plot shows the closing price of each week in blue, the moving average in red and the corresponding NVT ratio in a second panel in green.

As you can see, the NVT ratio is quite noisy. Willy Woo therefore always calculates a special moving average over 14 past and 14 future values in his observations. In a further development, the NVT signal developed by Dimitry Kalichkin, the last 90 days are averaged. In both cases the curves are much smoother, but with a very strong influence of the past.