On-chain data shows the Bitcoin Network Value to Transactions (NVT) Golden Cross has surged into a zone that has historically signaled overpriced conditions for the asset.
Bitcoin NVT Golden Cross Has Crossed Above 2.2
In a new post on X, CryptoQuant author Darkfrost has talked about the latest trend in the NVT Golden Cross of Bitcoin. The NVT Golden Cross is an indicator based on another metric known as the NVT Ratio.
The NVT Ratio keeps track of the ratio between the BTC market cap and transaction volume. The idea behind the indicator is that the ability to transact coins (as gauged by the transaction volume) could be considered as a reflection of the asset’s ‘fair value.’
Thus, through the comparison of the cryptocurrency’s current value (that is, the market cap) with this fair value, the metric can tell us about whether the asset is overvalued or undervalued.
When the value of the metric is high, it means the market cap is high compared to the transaction volum
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