As the Bitcoin Network Value to Transactions (NVT) Golden Cross remains on a firm, high value, digital currency enthusiasts are wary. For many, this could be a bearish sign for the benchmark cryptocurrency.
The discussion flared up when an analyst breached the subject of the recent NVT Golden Cross trend and its potential implications for Bitcoin’s price trajectory in a CryptoQuant Quicktake post. In essence, the NVT ratio serves as a market-weather-vane, reflecting how Bitcoin’s market cap measures up against its transactional volume. Typically, experts use this metric to determine if the cryptocurrency’s current price is inflated or depressingly low.
The high NVT ratio suggests that the market cap — or network’s value — outpaces the Bitcoin’s transactional ability (read: volume). This discrepancy indicates that the digital asset might be overpriced. In contrast, a low NVT ratio is likely a sign that the cryptocurrency’s price is undervalued, as it discusses a potential market rebound, where the market cap falls short of the volume.
However, in the face of the recent Golden Cross, it is the NVT Golden Cross — a tweaked variant of the NVT ratio — that holds more meaning. This ratio pits a short-term trend (a 10-day moving average) against a long-term trend (a 30-day moving average). The end-result serves as an indicator for the peaks and valleys in Bitcoin’s market performance.
The Golden Cross chart, illustrating the Bitcoin indicator trend over the last two years, indicates certain relevant zones for the cryptocurrency. When the metric surpasses 2.2, it’s probable that the cryptocurrency has reached a peak, with its price being overvalued. On the other hand, if the NVT Golden Cross dips under -1.6, it could suggest the formation of a bottom for the digital asset.
In recent months, the Bitcoin NVT Golden Cross has hovered into the red territory. Despite minor declines, it continues to rerise consistently, never touching the bullish regions.
At present, the metric has once again edged out of the top zone, but it remains dangerously close to it. This means that while a peak may not be imminent, a sustained uptrend is equally uncertain.
Consequently, skeptics believe Bitcoin will continue to face possible price drawdowns until the NVT Golden Cross marks a decrease in the green zone. Now all eyes are on how the indicator evolves in the near future and what influence it will have on Bitcoin’s price.
As of this moment, Bitcoin hovers around the $64,900 mark, recording a 4% growth over a week. The digital currency seems to be enjoying a surge in the last 24 hours, yet the future trajectory remains vague, shadowed by the hovering specter of the Golden Cross.
