Data shows that the Bitcoin NVT Golden Cross is still in the “overbought” region, a sign that more volatility may be coming for the cryptocurrency.
Bitcoin NVT Golden Cross continues to have a high value
As noted by an analyst in a CryptoQuant after, BTC’s long-term holders recently moved their coins. The “NVT ratiois an indicator that measures the relationship between Bitcoin’s market capitalization and on-chain transaction volume (both in USD). What this stat tells us is whether the value of the cryptocurrency (the market cap) is comparable to the ability to trade coins or not (the volume).
When the value of the metric is high, it means that BTC is currently overvalued because transaction volumes are low compared to market cap. On the other hand, low values imply that the crypto may be currently undervalued.
The “N/A Gold Crossis an indicator that compares the long-term trends (30 days MA) and short-term trends (10 days MA) of the NVT ratio to identify tops and bottoms in the metric. Now, here’s a chart that shows the trend in the NVT Gold Cross over the past few years:
Looks like the value of the metric seems to have been high in recent days | Source: CryptoQuant
As you can see in the chart above, the quant has marked the “overbought” and “oversold” regions in the Bitcoin NVT Golden Cross. When this metric has a value above 2.2, it means that the crypto may be overpriced right now. The coin has usually observed a bearish effect when the indicator has been in this region, as the chart shows.
The “underpriced” condition occurs in the zone where the BTC NVT Golden Cross has values less than -1.6. In the picture there is also the chart for the “stock adjusted dormancy” which is an indicator that tells us if long-term holders sell or not at the moment.
It appears that the LTHs may have participated in a large amount of selling recently. This measure affects the NVT Golden Cross, which has also risen in recent weeks. The indicator is now in overbought territory, suggesting that Bitcoin will see some bearish volatility soon.
BTC price
At the moment of writing, The price of Bitcoin floating around $17k, down 2% over the past week. Over the past month, the digital asset is up 1% in value. The chart below shows the trend in the coin’s price over the past five days.
BTC seems to have plunged during the last day | Source: BTCUSD on TradingView