Bitcoin’s Recent Price Surge

Bitcoin’s recent price action has continued its upward trajectory, trading as high as above the $120,000 price mark in the past 24 hours. This move suggests persistent bullish momentum following a period of sharp decline earlier this week.

As the price inches closer to its all-time high, on-chain data paints a picture of solid transactional support behind the price movement. Analysts highlight a divergence between Bitcoin’s market value and its underlying network activity.

NVT Golden Cross Indicator Insights

CryptoQuant analyst Sunflowr Quant shared insights examining the unusual behavior of the NVT Golden Cross indicator. Typically, this metric is expected to rise alongside price due to its function as a ratio between market cap and transaction volume. Currently, it is declining, which Sunflowr attributes to a significant uptick in on-chain activity.

On-Chain Growth Suggests Network Strength

According to Sunflowr, the inverse correlation between rising BTC price and falling NVT Golden Cross may indicate that the current rally is driven more by actual usage and transactions on the Bitcoin network rather than speculative trading.

> “A decline in the NVT ratio during a price increase implies that the transaction volume is rising at a faster pace than the market cap,” he noted. “This can be interpreted as a sign that the rally is supported by real economic activity.”

This aligns with the sentiment that healthy on-chain growth can serve as a foundation for more sustainable price increases. If transaction volumes grow organically and not solely from derivatives speculation, it indicates user adoption and financial utility contributing to price strength. Investors watching these indicators may find this a favorable environment, though caution remains as other metrics hint at evolving market dynamics.

Holder Rotation Signals Market Participation Shift

A separate analysis from CryptoQuant analyst IT Tech sheds light on another aspect of Bitcoin’s market structure: holder behavior. In a post titled “Holder Rotation,” IT Tech notes that long-term holders, those who have held BTC for more than 155 days, have begun net distribution, meaning they’re selling more than accumulating.

Conversely, short-term holders are showing net accumulation behavior, a dynamic often seen in late-stage rallies. This shift between long-term and short-term holders has historically served as a warning signal. Similar handoffs were observed in April 2021 and November 2023, both preceding local tops or cooling phases. While this doesn’t confirm a reversal, it underscores the need to monitor supporting metrics like exchange inflows and funding rates.

> “It’s a classic profit-taking pattern from seasoned wallets, while newer market participants may be entering due to rising prices,” IT Tech wrote.