The NVT ratio is a responsive indicator which measures the value flowing through a given blockchain based on moving averages. According to this metric, Basic Attention Token (BAT) is currently in its ‘accumulation zone.’
One cryptocurrency trader is arguing that Basic Attention Token (BAT) has 4-6 more months of accumulation before a ‘huge breakout.’ The conclusion was drawn based on the NVT 30dma, a metric which has proven to be very accurate in the past year.
The NVT Signal is a relatively new metric which was brought forward in 2018 by Dmitry Kalichki. Standard NVT Ratio is the ‘Network Valuation divided by the Transaction Value flowing through the blockchain and then smoothed using a moving average.’ However, Kalichki has applied the moving average to just transaction output, which brings another, more useful dimension to this indicator.
How does this all relate to Basic Attention Token? Well, as per a tweet by NebraskenGooner (@nebraskangooner), every time the price of BAT has dropped below the NVT 30dma, accumulation has occurred. This accumulation has been followed by a major pump, which has been increasing in percentages gained each time it has happened.
When price drops below NVT 30dma, accumulation occurs, with each period increasing in length
Each successive break above NVT level has shown an increase in % gain
If trend continues we would see a move of over 200% next break out after accumulation
Data from @glassnode pic.twitter.com/9QQ2KjDdCA
— NebraskanGooner📈 (@nebraskangooner) September 7, 2019
For example, BAT fell below the NVT 30dma in June/July 2018 and, after an accumulation period of 39 days, it pumped 32%. Likewise, this same pattern was also seen in August, September, and October of that same year which resulted in an accumulation period of 63 days and a successive 88% increase after that.
Now, we are approaching the ‘longest’ accumulation period thus far, which also means that the upside could be far greater than the last time BAT went below this metric. It is expected to last around 150 days.
Although it is unclear how much BAT will be valued in terms of satoshis during this interim period, the cryptocurrency seems poised to do well around the beginning of 2020 onwards. If confirmed, this would further prove the legitimacy of the NVT Signal and should be standardized as a trading indicator.
Do you agree that we are currently in an ‘accumulation zone’ for BAT? Let us know your thoughts below in the comments.
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Images courtesy of Twitter.