Over the weekend, Bitcoin (BTC) ‘s price circled between $54,424 and $58,215. However, as the new week begins, the coin presents an interesting revelation on-chain that could influence its next direction.

To put it in perspective, this condition has been historically crucial to BTC’s recovery. Will it be the same this time?

Bitcoin Oversold, Drives Multiple Bids

The metric in question is the NVT Golden Cross. NVT stands for Network Value to Transaction. Defined as a reformed index of the NVT ratio, the metric gauges if Bitcoin has hit the bottom or is at the top. 

When the value of this metric is 2.20 or above, it means the coin has hit the top, and a decline is imminent. As seen in the image below, this happened in December 2023, March 2024, and most recently, May.

Comparatively, if the NVT Golden Cross is under -1.60, it means that BTC is near or has hit the bottom. 

Currently, the metric is at -1.39, a potential sign of overselling. This selling pressure can be linked to Mt. Gox’s recent movement of BTC. 

Apart from that, the numerous transfers by the German government played a part. However, as it stands, the coin may be on the path of recovery, as overselling could foreshadow a rebound.

Furthermore, market participants seem to be waiting in line to buy BTC at the current discount prices. BeInCrypto discovered this after examining the Exchange On-chain Market Depth.

Read More: How to Buy Bitcoin (BTC) on eToro: A Step-by-Step Guide

This metric considers the activities on the order books of the top 20 exchanges. Divided into two parts, Exchange On-chain Market Depth considers the bid (buy) and ask (sell) segments.

According to IntoTheBlock, participants have placed bids for 22,075 BTC at an average price of 55,671. However, the total value of BTC set to be offloaded is 11,514 BTC at an average price of $55,673

Considering the higher value to be bought, Bitcoin’s price may evade another downturn and recover some of its recent losses.

BTC Price Prediction: No More Collapse

At press time, Bitcoin is trading at $56,752. However, the Liquidation Heatmap suggests that the price could be higher in the short term.

Liquidations Heatmap uses color variations to gauge the intensity of buy and sell orders in the market. Cooler colors like purple indicate a low level of activity. But when colors like green or yellow appear, it means the liquidity is concentrated at a price level.

By analyzing the heatmap, one can spot potential areas of interest, resistance, and support levels.

According to Coinglass, there is a high level of liquidity at $57,516 and another at $58,037. This high level of liquidity could attract a Bitcoin price increase in these regions.

Read More: Bitcoin (BTC) Price Prediction 2024/2025/2030

The Relative Strength Index (RSI), which measures momentum, also supports this potential. On the daily BTC/USD chart, it is at 34.61. 

When the indicator’s reading is below 30.00, it is oversold. When it is above 70.00, it is overbought. Therefore, the RSI’s position implies that Bitcoin has left the oversold region and aims for substantial recovery.

Going by the positions of the Fibonacci Retracements, which spot supports and resistance points, BTC may retest $58.251 if it breaks through $57,016.

Meanwhile, RektCapital, a pseudonymous analyst on X, also commented on Bitcoin’s price action. According to him, the coin may have left sideways trading while closing in on re-accumulation.

“Bitcoin is on the cusp of performing its first Weekly Candle Close below the Re-Accumulation Range Low for the first time in the over four months that this range has existed,” Rekt Capital posted.

However, the coin still trades below the 20-day Exponential Moving Average (EMA), which tracks price changes to determine a trend’s strengths or weaknesses. 

If Bitcoin’s price is above the 20-day EMA, it would indicate a solid bullish trend. However, as long as the coin wobbles below the threshold, it risks retracement to $55,019.

Bitcoin’s (BTC) price volatility continues to challenge investors. Early Monday, it fell to $54,200, negating gains from a peak of roughly $58,500 over the weekend.

The last few hours have been particularly turbulent, with significant fluctuations and liquidations characterizing the market.

Bitcoin Causes Liquidations of Over $100 Million in the Last 4 Hours

Despite a promising attempt at recovery on Sunday, Bitcoin faced stiff resistance that led to a sharp decline. Within just four hours, the market experienced liquidations totaling $113 million, comprising $70 million from long positions and $42.64 million from short positions. Overall, nearly $250 million worth of trades were liquidated in the past 24 hours, indicating persistently choppy conditions.

Avinash Shekhar, co-founder of the crypto derivative exchange Pi42, provided insights into the market’s volatility in an interview with BeInCrypto.

“Bitcoin’s price is locked in a tug-of-war between bulls and bears. Sellers pulled the price down to near $53,500 on July 5, yet lower levels attracted buying by the bulls. Then, bears again drove the price down from $58,300 to $54,200 in the morning of July 8,” Shekhar told BeInCrypto.

Read more: Bitcoin (BTC) Price Prediction 2024/2025/2030

Meanwhile, Metaplanet, a Japanese investment firm, has taken strategic steps to strengthen its position in the crypto market. On July 8, it announced a purchase of 42.47 Bitcoin, roughly worth around $2.35 million.

This happened after the company announced on June 24 that it would issue a $6.2 million bond to bolster its Bitcoin holdings. The decision aims to enhance Metaplanet’s financial stability by incorporating Bitcoin as a reserve asset. The firm seeks to mitigate risks associated with Japan’s economic challenges, including high government debt and sustained negative real interest rates.

Meanwhile, potential selling pressures loom from Mt. Gox investors and the German government. Recent reports indicate that Bitcoin addresses linked to German authorities transferred 700 BTC, valued at $40.47 million, to an unidentified ‘139PoP’ address this past weekend, as identified by Arkham’s on-chain analytics.

This activity is part of a broader pattern of behavior from the German government, which has recently moved significant quantities of Bitcoin to major exchanges such as Coinbase, Bitstamp, and Kraken. These moves followed the seizure of 50,000 BTC earlier in the year from the film piracy site Movie2k.

Read more: Who Owns the Most Bitcoin in 2024?

The balance between optimism and caution in the crypto market continues to provoke debate and speculation among stakeholders. However, the sentiments are more aligned towards fear. The crypto fear and greed index indicates a score of 28, which is in the fear zone.

The German government has extended its significant Bitcoin (BTC) transfers over the past day, continuing the trend that began last month.

Bitcoin addresses linked to German authorities sent another 700 BTC, worth $40.47 million, to the ‘139PoP’ address this weekend. This transaction was identified through the on-chain analytics firm Arkham.

German Government Bitcoin Transfers

Reports suggest that this transfer indicates a potential intention to sell the assets, as the unlabeled address may belong to an institution or an over-the-counter service provider. Meanwhile, this is not the first time the German government has interacted with the address. In the last three days, the authorities have sent more than 1,200 BTC to this wallet.

The German government began transferring Bitcoin to crypto exchanges like Coinbase, Bitstamp, and Kraken last month after seizing 50,000 BTC from the film piracy site Movie2k earlier in the year. Blockchain analytic platform Lookonchain noted that Germany has made a BTC transfer every day this month. This transaction reduced its holdings to 39,826 BTC, valued at around $2.3 billion.

Read more: How To Make Money With Intel-To-Earn on Arkham Intelligence

This continuous selling activity has drawn criticism from Joana Cotar, a member of the German Bundestag. The Parliament member urged the government to develop a comprehensive Bitcoin strategy instead of hastily selling its holdings.

Cotar further argues that Bitcoin offers an opportunity to diversify the state’s assets and reduce the risks associated with traditional investments. Additionally, she pointed out that Bitcoin’s scarcity and deflationary nature make it a hedge against inflation and currency devaluation.

“Instead of holding Bitcoin as a strategic reserve currency, as is already being debated in the USA, our government is selling on a large scale,” Cotar lamented.

Meanwhile, TRON founder Justin Sun offered to purchase the German government’s BTC holding to reduce its market impact. However, CryptoQuant CEO Ki Young Ju argues that government selling activities have had minimal impact on BTC prices because they account for only 4% of the total cumulative realized value since 2023.

“$224 billion has flowed into this market since 2023. Government-seized BTC contributes about $9 billion to the realized cap. It’s only 4% of the total cumulative realized value since 2023. Don’t let govt selling FUD ruin your trades,” Ju wrote.

Read more: Who Owns the Most Bitcoin in 2024?

Data from Arkham shows that governments, including the US, Germany, the United Kingdom, and El Salvador, hold substantial amounts of Bitcoin, totaling approximately $18 billion.