NVT Indicator Shows BTC Is Overbought
There are a lot of specific trading indicators, but Bitcoin has even more. Part of them is On-chain Indicators, which is specific only for PoW networks. Such as Network Value to Transaction (NVT). NVT Ratio which is simply the Network Value divided by Daily Transaction Value. NVT Ratio is a valuation indicator that was introduced by analyst Willy Woo in 2017.
In 2018 Dmitry Kalichkin created a much more responsive variation, which I’ve been calling NVT Signal. What Dimitry did was to apply the moving average just to the volatile Transactions component only without smoothing the already stable Network Valuation component.
For BTC, any level above 75 is in the overbought zone, indicative of a market top, and levels below 45 tend to be oversold zone. At the moment of writing, the NVT indicator is on 73,8 level that is so close to the psychological 75 zone.
So let’s watch closely!
