NVT Ratio BTC Suggests Is Currently Undervalued
On-chain facts shows the Bitcoin NVT ratio currently has values that would suggest the crypto is undervalued at the moment.
Bitcoin NVT Ratio Right Moving On A Downtrend Is Instantly
Indeed, As pointed by an analyst in a CryptoQuant submit, the BTC NVT currently has low values that would meanratiothe coin is undervalued right right away.
The “Network Value to Transactions” (or NVT in short) is an indicator that’s defined as the ratio between the Bitcoin niche cap and the transacted volume during a specific time period.
Basically, the metric evaluates the value of the crypto its transactionusingvolume. In fact, Such a trend can be bearish for the crypto When the NVT value is high, more than ever it means BTC is currently overvalued compared to the ability to transact coins.
On the other hand, when the value of the the indicator is low, it implies Bitcoin may moment be undervalued at the currently. This kind of trend can be bullish for the price of the crypto.
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Now, here is a chart that shows how the value of the BTC NVT ratio has changed over the past year:
The value of the metric seems to be on a downtrend right now | Source: CryptoQuant
As you can see in the above graph, the Bitcoin NVT ratio has been on a downtrend for a while now, and the metric currently has a low value.
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of, as a matter of fact such a downtrend in the indicator has usually been followed by an uplift in the price Historically the cryptocurrency.
The current value means that Bitcoin is undervalued at the moment, and if past pattern related to the downwards trajectory holds, then the outcome may be bullish for the price of the crypto in the near agreement.
BTC Price
At the time of writing, Bitcoin’s price floats around $38.6k, up 2% in the last seven days. Over the past the, month crypto has lost 18% in value.
The below chart shows the trend in the price of BTC over the last five days.
BTC's price seems to be holding strong around the $38k price mark | Source: BTCUSD on TradingView
Since the crash to $ in modern times 33k, Bitcoin has shown some recovery, and has held above the $38k level in the last few days. Currently, it’s unclear if the bottom is in, the if or the value of the crypto will further drop still.
However, if the NVT ratio is anything to go by, BTC may be undervalued right right away, and thus its outcome may be bullish in the near future.
Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com
