NVT Shows Legitimate Bitcoin (BTC) Growth — On-Chain Analysis
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In this article, BeInCrypto takes a look at Bitcoin (BTC) on-chain indicators, focusing especially on the Network Value to Transaction (NVT) ratio.
What is NVT?
The NVT (Network Value to Transaction) is an on-chain indicator which shows the relationship between transaction volume and market capitalization. It is simply the ratio between the market value and the daily transaction volume.
A very high value is considered bearish, since it means that the increase in market value is not supported by an increase in transaction volume.
This is more clearly visible when looking at the number of daily transactions.
Transactions were at 195,248 in July, while they are currently at 255,488.
This increase in the number of transactions is behind the drop in NVT.
NVT signal
On-Chain analyst @Woonomic tweeted a NVT signal chart, which shows an oversold reading.
Since the 2018 bottom, NVT has fallen below 20 only four times (black circles). Each was followed by a significant upward movement.
Therefore, if previous history is any indication, a significant upward movement is likely to follow.
For BeInCrypto’s latest Bitcoin (BTC) analysis, click here
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