Data shows the Bitcoin NVT Golden Cross is still in the “overbought” region, a sign that there may be more volatility to come for the cryptocurrency.
Bitcoin NVT Golden Cross Keeps At A High Price
A CryptoQuant analyst pointed this out postBTC long-term holders recently moved their coins. The “NVT ratio” is an indicator that measures the ratio between the Bitcoin market cap and the transaction volume on the chain (both in USD). This metric measures whether the market cap (or the volume) of cryptocurrency is comparable to its value.
BTC’s current value is high because of its low transaction volume and relative market cap. Low values, on the other hand could indicate that crypto is undervalued at the moment.
The “NVT Golden Cross” is an indicator that compares the long-term (30-day MA) and the short-term (10-day MA) trends of the NVT ratio to identify tops and bottoms in the metric. Below is a chart which shows the NVT Golden Cross’s trend over the last few years.
It appears that the value of the metric seems high in recent times | Source: CryptoQuant
As you can see in the above graph, the quant has marked the “overbought” and “oversold” regions in the Bitcoin NVT Golden Cross. This metric is worth more than 2.2. It means that the crypto may be too expensive right now. As the chart shows, the coin has had a bearish effect whenever the indicator was in this area.
The “underpriced” condition occurs in the zone where the BTC NVT Golden Cross has values less than -1.6. In the image, there is also the chart for the “supply adjusted dormancy,” an indicator that tells us whether long-term holders are selling or not currently.
LTHs seem to have participated in some selling activity recently. This metric can have an impact on the NVT Golden Cross which has also increased in the past few weeks. The indicator is currently in the overbought area, suggesting that Bitcoin may soon see some bearish volatility.
At the time of writing, Bitcoin’s price floats around $17k, down 2% in the last week. The digital asset has seen a 1% increase in value over the last month. The graph below shows the trend in coin price over the past five working days.
BTC appears to have plummeted in the last day. Source:| Source: BTCUSD on TradingView