The early April Bitcoin price rally that transformed into a mini-parabola, was fueled by a powerful short squeeze and was strategically orchestrated by a single actor. The powerful move did indeed incite much FOMO and bullish sentiment throughout the market, but such a rise in value over such a short period of time rarely feels organic.
Smart and cautious investors often look to a variety of data points to understand the underlying value of an asset, as part of their technical and fundamental analysis. One such tool, NVT, is showing that price has diverged significantly from the network value to transactions ratio – or how much value is being transmitted across the Bitcoin network.
Bitcoin NTV Ratio and Price Divergence Gives Strong Sell Signal
Cryptocurrencies being an emerging, new, and misunderstood technology that’s value and use case isn’t even close to being fully realized, makes giving the assets an accurate valuation incredibly difficult. To assist with fundamental analysis of Bitcoin and other cryptocurrencies, crypto analyst Willy Woo created NVT – Bitcoin’s network value to transactions ratio, or how much value is being sent across the network. The tool is used to give a more accurate depiction of the asset’s actual