Bitcoin NVT Ratio Signals Positive Trend
Recent on-chain data reveals that the Bitcoin Network Value to Transactions (NVT) ratio has remained above the bear zone, suggesting healthy price growth. According to analytics firm Santiment, the NVT ratio tracks the relationship between Bitcoin’s market cap and daily circulation. The market cap represents the total value of the asset, while circulation refers to unique tokens moving within a 24-hour period.
Santiment’s use of circulation instead of transaction volume eliminates irrelevant noise in the data. A high NVT ratio indicates an overvalued asset, while a low ratio suggests that the cryptocurrency may be underpriced. The recent significant boost in the NVT ratio indicates healthy network activity growth compared to price rise.
BTC Price Recovery
Bitcoin experienced a pullback to $35,000 but has since recovered above $37,000. This recovery is supported by the current NVT ratio values, indicating that Bitcoin’s transaction activity justifies its market cap, potentially preventing an immediate correction.
Hot Take: Positive Signs for Bitcoin
The sustained improvement in Bitcoin’s NVT ratio and its recovery above $37,000 signal a positive trend for the cryptocurrency. The healthy network activity growth and market cap alignment suggest that the rally may continue in the near future without facing an immediate bearish correction.
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