Data on the chain shows the Bitcoin network value for transactions (NVT) Golden Cross has risen in a zone that has indicated historically too expensive conditions for it.
Bitcoin n / a golden cross has been crossed above 2.2
In a new one after On X, cryptoquant author DarkFrost spoke about the latest trend in the NVT Golden Cross from Bitcoin. The NVT Golden Cross is an indicator based on another metric known as the NVT ratio.
The NVT ratio keeps the ratio between the BTC market capitalization and the transaction volume. The idea behind the indicator is that the ability to handle coins (as agreed by the transaction volume) can be considered a reflection of the ‘real value’ of the active.
So by comparing the current value of the cryptocurrency (that is, the market capitalization) with this real value, the metric can tell us whether it is actively overvalued or undervalued.
When the value of the metric is high, it means that market capitalization is high compared to the transaction volume. Such a trend could imply that BTC can overheat. On the other hand, the indicator can be low for the space for the coin to grow in relation to its volume.
Now the Golden Cross, the actual measure of relevance, is a signal indicator such as the Bollinger tires for the NVT ratio that aims to find tops and soils in its value. The NVT Golden Cross does this by comparing the short-term trend (represented by the 10-day MA) with the long-term (30-day MA).
Below is the graph shared by the analyst who shows the trend in the metric in recent years.
As shown in the graph above, the Bitcoin NVT Golden Cross recently registered a sharp increase and entered the region above 2.2 marking (roughly marked).
This zone is where the market capitalization of the cryptocurrency historically exceeded the transaction volume to a certain extent that a reversal to the average tends to prevent. In other words, it is where price corrections have taken place for the active disadvantage.
However, it is visible from the graph that not every top in the NVT Golden Cross coincides with a price top in this territory. And in many cases that it does, the deterioration of the asset is not to a certain extent.
So far, however, the signal has appeared, the active is indeed a potential sign that the same reversal effect can be in the game again. It is still to be seen or a disadvantage will be limited, or that this will be one of those cases where the signal was followed by an extensive drawing.
BTC price
At the time of writing, Bitcoin drives around $ 103,700, almost 5% in the last seven days.