Bitcoin NVT golden cross signals continued price pullback
The Bitcoin Network Value to Transactions (NVT) Golden Cross indicator suggests that Bitcoin’s (CRYPTO:BTC) price decline may persist, according to a CryptoQuant analysis.
The metric highlights a disparity between Bitcoin’s high market capitalisation and low transaction volume, raising concerns about speculative overvaluation.
Bitcoin has dropped 5.5% over the past week, trading in the low $80,000 range.
Earlier this month, the cryptocurrency hit a local bottom near $76,000, sparking hopes for recovery.
However, CryptoQuant analyst BorisVest warns that the current NVT Golden Cross reading indicates further price pullbacks are likely.
“A high market cap with low transaction volume suggests that Bitcoin’s price may be inflated due to speculative activity,” BorisVest explained.
The NVT Golden Cross measures the short-term trend of Bitcoin’s market cap-to-transaction volume ratio against its long-term trend.
Historically, values above 2.2 signal overvaluation and potential price tops, while values below -1.6 indicate undervaluation and buying opportunities.
The current reading remains elevated, suggesting bearish sentiment in the short term.
Meanwhile, other analysts point to macroeconomic factors that could influence Bitcoin’s trajectory.
Ali Martinez noted that BTC traders are sitting on an average unrealised loss of 14.57%, which may discourage selling at current prices.
Additionally, Master of Crypto highlighted the potential for a bullish reversal as the M2 money supply increases and technical indicators like the “megaphone pattern” hint at upward momentum.
Despite these mixed signals, Bitcoin’s recent surge to $83,444 reflects cautious optimism among traders.
For sustained growth, analysts emphasise that network transaction volume must increase to support higher valuations.
Without such fundamental improvements, speculative activity may continue driving volatility in BTC’s price movements.
At the time of reporting, the Bitcoin (BTC) price was $83,013.78.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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