On-chain data shows signs aren’t looking good for Bitcoin as the NVT ratio is indicating that the crypto is still overvalued right now.
Bitcoin NVT Ratio Continues To Be At High Values
As pointed out by an analyst in a CryptoQuant post, BTC is currently overvalued from an on-chain perspective. The “Network Value to Transactions (NVT) ratio” is an indicator that measures the ratio between the market cap of Bitcoin and its transaction volume (both in USD).
This ratio judges whether the current value of Bitcoin (that is, the market cap) is fair or not, by comparing it against the network’s ability to transact coins right now (the transaction volume). When the metric has a high value, it means the price of BTC is high compared to the volume, and thus the coin could be inside a bubble at the moment. On the other hand, low values suggest BTC may be undervalued as the chain has a high ability to transact coins (in comparison to the market cap) right now.
Here is a chart that shows the
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