On-chain data shows the Bitcoin NVT Golden Cross has still not breached into the territory that marked the tops of previous cycles.
When the value of this metric is high, it means the value of the network (as represented by the market cap) is high compared to its ability to transact coins (the volume). Such a trend can be a sign that the asset may be overvalued. On the other hand, the indicator having a low value can imply the cryptocurrency’s price could have room to grow as its market cap isn’t inflated against its transaction volume.
Now, here is a chart that shows the trend in the 30-day exponential moving average (EMA) of the Bitcoin NVT Ratio over the past decade:
As displayed in the above graph, the 30-day EMA Bitcoin NVT Golden Cross currently has a value of around zero, which suggests the market is in a neutral phase according to the NVT Ratio.
In the chart, the quant has highlighted the zones where tops and bottoms have historically tended to occur. It would appear that a highly positive value generally signals some sort of top for BTC, while a negative one can lead to a bottom.
In the current cycle so far, the indicator hasn’t seen any spike into the red zone. Whether this means that this bull market is an exception, or that Bitcoin is yet to reach its top, only remains to be seen.
Bitcoin surged toward $114,000 on Tuesday, but it would appear that the recovery was only short-lived as the coin is already back at $108,000.
