Data from Glassnode reveals a crossover in the Bitcoin NVT price model has recently taken place, something that has historically been bullish for the crypto’s price.
Bitcoin NVT price 28-Day Curve has surpassed the 90-Day Mark
According to the most recent weekly Glassnode report, BTC NVT’s price model shows a bullish trend.
NVT stands for “Network Value to Transaction.” The NVT ratio is an indicator that measures the ratio between the Bitcoin market cap and the network transaction volume.
The ratio is generally high, which means that cryptos are overvalued at the moment. However, low ratios may indicate that crypto is undervalued.
The “NVT price model” takes the two-year median of this metric and multiplies it by the current transaction volume.
“The resulting model thus establishes an implied valuation based on the current utilisation levels of Bitcoin for value settlement,” explains the report.
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Below is a chart that illustrates the change in both the 30-day and the 90-day periods of NVT’s price model.
Source: Glassnode's The Week Onchain - Week 17, 2022| Source: Glassnode's The Week Onchain - Week 17, 2022
The graph above shows that both NVT price models value Bitcoin between $32.5k and $36.1k (90-day), respectively. These two metrics seem to be at their lowest point, with the possibility of a reverse.
Recenty, the speedier 28-day curve surpassed that of the slower 90 day version. Such a formation has historically been bullish for the coin’s price.
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A bearish flag is lit whenever NVT’s 90-day price model crosses the 28-day mark.
While the present crossover could be considered bullish for Bitcoin prices, confirmation is needed to confirm that there’s positive momentum.
BTC price
At the time of writing, Bitcoin’s price floats around $40.5k, down 1% in the last seven days. The crypto’s value has dropped 9% over the last month.
Below is a chart showing the change in coin price over the past five days.
Source: BTCUSD on TradingView| Source: BTCUSD on TradingView
Bitcoin is back up above the $40k mark after falling below the $39k threshold yesterday.
It’s unclear currently whether this new positive momentum will last or if it will die out just like the last few attempts. But, it is possible that crypto will see real growth if the NVT model price model is any indication.
Unsplash.com featured image, Charts from TradingView.com and Glassnode.com charts