Despite the current recovery of stock and cryptocurrency markets, most analysts predict a continuation of the correction. However, according to recent data, the nature of the indicator of intrachain activity becomes bovine. Historically, this precedes another uptrend in the market.
Lookintobitcoin founder Philip Swift said yesterday that a fateful reversal may eventually happen. The Bitcoin Network Momentum indicator has sharply changed direction and started to grow. This may precede the next bullish period in the leading cryptocurrency market.
The analyst draws the attention of subscribers to the fact that:
Volume has grown in the past few days, despite capitulation and price volatility.
Why intrachain volume is important for the BTC trend
Volume is a key technical indicator that analysts and traders consider when studying a trend. This indicator reflects the general activity of the market, and a growing turnover indicates that users make more transactions. As Swift explains:
The Bitcoin Network Momentum reflects the relationship between the BTC price and the daily value of transactions passing through the blockchain.
In the chart below you can see the relationship between price and volume. At the early and late stages of the bear market, a drop in volume occurs, and bullish periods begin against a background of growth in volumes.
The intra-chain volume of BTC helps investors determine market momentum and not pay attention to short-term false price fluctuations caused by the efforts of a small group of whales. The Bitcoin Network Momentum indicator can confirm that the overall trend is becoming bullish.
Swift regards the growth of Bitcoin Network Momentum as a bullish signal:
Despite the fact that, compared to previous cycles, more and more funds are stored offline, I expect a significant increase in daily intrachain volume, as smart money starts accumulating before a new stage of growth.
The analyst also recommends “monitor reliable trading volumes on exchanges” to confirm a preliminary signal about the approach of a new bullish period in the crypto industry.
