When will the bear market end for bitcoin?


In its entire history bitcoin has seen 3 bear markets. We are in the third one right now. One signal we can use to determine the end of a bear market is for the price to cross above its 200 day moving average.


In order to analyse blockchain assets a new indicator called NVT was introduced by Willy Woo, market researcher, writer for Forbes and Coindesk.

NVT Ratio is the Network Valuation divided by the Transaction Value flowing through the blockchain and then smoothed using a moving average. This is probably the first trading indicator to use blockchain data instead of the basic price and volume data coming in from exchanges.

NVT indicator tends to peak during bear markets. The indicator is lagging in relation to the start of a bear market, however it is a leading indicator in relation to the end of a bear market.

In other words we can use NVT to try find a bottom. NVT returns to its normal range before the next accumulation phase.


Here we can see that NVT has peaked in the middle of 2014. However, the 200DMA wasn't crossed and the bear market didn't end until late 2015.

Note that before the start of the bull market NVT had to return to its previous levels.

The 2014 situation is similar to what is happening at the moment and suggests an upcoming bull trap.


Therefore, if NVT is to be considered as a valid indicator, it should return to its previous levels before a bullish cross of 200DMA can be expected.