Bitcoin's NVT Indicator Points to Market Revaluation in Progress

Chain analysis from CryptoQuant researcher MorenoDV_ reveals critical NVT signals emerging in Bitcoin’s market cycle. The NVT metric—serving as Bitcoin’s equivalent to a price-to-earnings ratio—measures how transaction volume on the network aligns with market valuation. When these two metrics disconnect significantly, it reveals whether Bitcoin’s price reflects actual on-chain economic activity or diverges from network fundamentals.

How the NVT Golden Cross Reveals Market Mispricing

The NVT golden cross indicator (smoothed using a 100-day moving average) acts as an early warning system for valuation extremes. By comparing short-term NVT against long-term trends, analysts can identify when market sentiment disconnects from network economics. Currently, the indicator displays a substantial negative divergence, with short-term NVT trading well below the long-term average—a pattern that historically signals depressed market sentiment and structural undervaluation.

This phenomenon carries important implications. When investors become overly cautious and reduce leverage, the NVT typically crashes to extreme lows. During the present cycle, the indicator bottomed at a historic -0.58 before recovering to approximately -0.32. This recovery trajectory, though still within conservative valuation territory, suggests that prices are gradually recalibrating toward transaction-driven fundamentals.

The Market Transition from Undervaluation to Equilibrium

Historically, deep NVT divergences precede market accumulation phases. After periods of deleveraging and risk-averse positioning, selective capital typically re-enters, establishing healthier price discovery mechanisms. The current market environment appears to be at this pivotal transition point.

Rather than explosive rallies, this stage typically features gradual price recalibration supported by selective institutional and retail capital flows. The conservative valuation zone persists because market participants remain cautious, but the directional shift in NVT—from historic lows toward equilibrium—suggests structural healing is underway.

NVT News and Long-Term Market Implications

For investors monitoring Bitcoin’s valuation health through NVT metrics, this revaluation period offers a window into authentic network value discovery. The on-chain fundamentals remain intact, and current price levels reflect temporary market dislocations rather than fundamental network deterioration. As capital structures normalize and participants rebuild confidence, the gap between market price and on-chain activity should continue narrowing, positioning the market for more sustainable growth foundations.