CryptCraze takes a look at on-chain indicators, more specifically the NVT (Network Value to Transaction) in order to determine if the Bitcoin (Bitcoin (BTC)) network is properly rated.

NVT is an on-chain indicator that measures the ratio between market capitalization and transaction volume. It was created by Willy Woo.

A strong indicator reading suggests that the network cost is outpacing its transaction volume. It is studied a bearish sign, afterward an increase in market cost has to be supported by a relatively proportional increase in transaction volume.

For a more detailed analysis of NVT, click here

Current reading

Since the beginning of 2019, NVT has generally traded in a area between 20 and 40, with a few discrepancies atop and below this level.

The fluctuations started becoming more pronounced near the end of 2021. At the time, the BTC cost was approaching its all-time high.

On Sept, NVT deviated below it area low before recovering it.

More vitally, the indicator has been downward alengthyside the BTC cost afterward Dec 2021. This is examined a bullish sign, afterward despite the rate drop, transactions are not weakening at the same cost.

NVT Reading

Chart By Glassnode

While the BTC rate is very close to its July lows, the number of transactions is not. It is directly at 250,663, considerably atop the 195,224 lows of July 2021.

Transaction count
Chart By Glassnode

NVT signal

The NVT signal is a slightly divergent indicator, that uses a 90-day moving average (MA) of the transaction volume instead of the raw data.

Since the 2018 bottom, NVT has fallen below 20 only four times (black circles). Most recently, it did so on Jan 24, while a low of 16.9 was captured. The previous three drops below 20 all led to considerable ascending progressments.

Therefore, it is likely which a analogous ascending changement will follow this time around.

NVT Signal

Chart By Glassnode

For CryptCraze’s latest BTC analysis, click here

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