This morning, the esteemed blockchain intelligence firm, CryptoQuant (@cryptoquant_com), shared their insightful analysis of Bitcoin (BTC) via Twitter. Their analysis delved into BTC’s NVM Ratio, a crucial metric utilized to evaluate the equitable value of a blockchain network, taking into account the number of active users.
As per the report, a significant NVM Ratio implies an overestimation of the network, signaling an inflated price about the count of active users. Conversely, a low NVM Ratio indicates the opposite.
According to the report, the NVM Ratio of the top player in the crypto market experienced fluctuations between 0.6 and 2 throughout 2021. It’s worth noting that values exceeding 2 suggest an overvalued network, which coincided with BTC’s record-breaking price surge.
According to CryptoQuant’s report, BTC’s NVM Ratio has been exhibiting a downward trend since 2022, with the figure dropping below 0.6 and indicating the onset of the crypto bear market. The NVM Ratio followed this descending pattern until it reached a two-year low of 0.26, attributed to the FTX collapse. These findings suggest that the crypto market is experiencing a challenging phase, and investors should exercise caution when making investment decisions.
According to the report, BTC’s NVM Ratio significantly shifted in January 2023, skyrocketing from 0.26 to 0.6 and surpassing its 100 EMA. This surge in BTC’s NVM Ratio was accompanied by a corresponding increase in the cryptocurrency’s market value, with BTC’s price climbing from $17K to $21K.
The latest report reveals that the NVM Ratio for BTC is on an upward trajectory, reaching a 7-month high of 0.75. Based on CryptoQuant’s meticulous analysis, it is highly likely that this trend will persist and the NVM Ratio will surpass the one mark. These findings suggest a promising outlook for BTC and its investors.
Disclaimer: The insights, perspectives, and data presented in this price analysis are published in good faith. Readers must conduct their own research due diligence. Any decision made by the reader is solely their responsibility, and Crypto Outlooks shall not be held responsible for any consequential or incidental harm or loss.
