Key indicators in Edwards’ analysis:
- Heater Indicator (Derivatives Sentiment):
- Tracks perpetual swaps, futures, and options markets.
- Recently plunged as BTC fell, cooling overheated leverage.
- Currently in the green zone, historically signaling local bottoms (similar to Nov 2022).
- Dynamic Range NVT (Network Value to Transactions):
- Measures BTC’s market cap vs. transaction volume.
- Recently dropped below the lower band, suggesting Bitcoin may be undervalued.
- Indicates potential for upside in the short term.
Edwards’ view:
“We have some big headwinds to resolve (like institutional selling), but I cannot be bearish with Heater in the deep green zone today + fundamental value across the board.”
Implication: BTC may see short-term gains as derivatives sentiment cools and on-chain fundamentals indicate undervaluation.