Bitcoin is showing early signs of undervaluation as traders weigh improving on-chain metrics against mixed exchange flows and weak short-term demand.
CryptoQuant author CryptoOnchain noted Bitcoin closed at $63,850.66 on July 28, down from its recent high of $66,520 on July 21. However, blockchain data suggests that the market could be preparing for a larger move.
NVT Golden Cross
CryptoOnchain pointed to the NVT Golden Cross as a key bullish trend. This metric compares Bitcoin’s market value with its transaction activity and helps identify when the price may be lower than the network’s actual usage suggests.
The indicator jumped 429% above its 90-day average and increased 34.7% over the past week to reach 0.36.
Historically, a rising NVT Golden Cross indicates that network activity is growing faster than Bitcoin’s price, which can suggest that the asset is undervalued. While the indicator has been associated with recoveries in previous market cycles, the analyst said it should not be used alone to predict future price movements.
Binance $BTC Flows Change Quickly
While the valuation signal is positive, exchange data shows mixed signs. Binance saw 5,124 $BTC leave the platform on July 27, but the trend quickly reversed, with 1,109 $BTC flowing back in on July 28.
The sudden shift suggests that traders are adjusting their positions rather than following a clear buying or selling trend. CryptoOnchain noted that these rapid changes can create short-term market uncertainty and make Bitcoin’s next move more difficult to predict.
At the time of writing, Bitcoin is trading at $63,980, down 0.51% over the past day and down 2.4% over the past week.
Bitcoin Funding Rates and Coinbase Premium Remain Weak
Other market indicators also point to cautious sentiment. Binance funding rates remained close to 0%, indicating that traders were not using excessive leverage in the futures market.
The Coinbase Premium also fell to -0.11, its lowest level in two weeks. A negative premium suggests weaker buying demand from U.S. investors compared with other markets.
Volatility Compression Signals Bigger Move Ahead
Supporting the constructive on-chain outlook, another CryptoQuant author, RugaResearch, said Bitcoin’s current low volatility could signal that a major price move is approaching.
The analyst noted that Bitcoin’s realized volatility has fallen to cycle lows, meaning the price has remained unusually stable for an extended period. At the same time, the ADX indicator, which measures trend strength, has been gradually increasing even as Bitcoin trades within a narrow range.
RugaResearch explained that low volatility often indicates that the market is building momentum ahead of a larger move. However, these indicators do not reveal whether the next move will be upward or downward.
The analyst added that similar periods of low volatility have previously been followed by major Bitcoin price movements, suggesting that traders should prepare for a potential breakout.