• Advertise
  • Submit a Press Release
NewsBTC
Bitcoin & cryptocurrency news today, price & technical analysis
Price & Market
Cap Data from
Nomics Logo
  • News
    • Bitcoin
    • Ethereum
    • Ripple
    • Cardano
    • Tezos
    • EOS
    • Chainlink
    • Sponsored
    • Press Releases
  • Analysis
    • Bitcoin (BTC)
    • Ethereum (ETH)
    • Cardano (ADA)
    • Chainlink (LINK)
    • Litecoin (LTC)
    • Tezos (XTZ)
    • Zcash (ZEC)
    • EOS
    • YearnFinance (YFI)
  • Education
    • Accepting Bitcoin payments
    • Using Bitcoin
    • What is Bitcoin Mining
    • How to Trade Bitcoin
    • How to Buy Bitcoin
    • Digital Currency Exchange
    • Proof of Existence
    • Is Bitcoin legal?
    • Bitcoin Books
  • Trading Course
  • Directory
    • Crypto Businesses
    • Bitcoin Brokers
    • Casinos
    • Sportsbooks
  • TradeeToro
  • Gamble +Try
  • Play GamesTry
  • BUY BITCOINTry
No Result
View All Result
  • News
    • Bitcoin
    • Ethereum
    • Ripple
    • Cardano
    • Tezos
    • EOS
    • Chainlink
    • Sponsored
    • Press Releases
  • Analysis
    • Bitcoin (BTC)
    • Ethereum (ETH)
    • Cardano (ADA)
    • Chainlink (LINK)
    • Litecoin (LTC)
    • Tezos (XTZ)
    • Zcash (ZEC)
    • EOS
    • YearnFinance (YFI)
  • Education
    • Accepting Bitcoin payments
    • Using Bitcoin
    • What is Bitcoin Mining
    • How to Trade Bitcoin
    • How to Buy Bitcoin
    • Digital Currency Exchange
    • Proof of Existence
    • Is Bitcoin legal?
    • Bitcoin Books
  • Trading Course
  • Directory
    • Crypto Businesses
    • Bitcoin Brokers
    • Casinos
    • Sportsbooks
  • TradeeToro
  • Gamble +Try
  • Play GamesTry
  • BUY BITCOINTry
No Result
View All Result
NewsBTC
No Result
View All Result
Price & Market
Cap Data from
Nomics Logo
Home Cryptocurrency news Bitcoin

NVT Divergence Reaches Bull Market “Mania” Levels, Bitcoin Price Increase Not Organic

Tony Spilotro by Tony Spilotro
2 years ago
in Bitcoin, Cryptocurrency news
Reading Time: 3min read
NVT Divergence Reaches Bull Market “Mania” Levels, Bitcoin Price Increase Not Organic
Advertisement
Listen to Article

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 NVT 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 in-value.

5 BTC + 300 Free Spins for new players & 15 BTC + 35.000 Free Spins every month, only at mBitcasino. Play Now!

Related Reading | Crypto Analyst: Bitcoin Price Now Above Ideal Buying Zone, Shortest Duration Yet 

Large divergences between Bitcoin price and the NVT ratio have usually preceded a massive dump, as NVT can help determine when Bitcoin is vastly overvalued compared to how much value is being transmitted across the network.

If you want to see just how high the price exceeded what's normal for on chain capital flows, NVT Caps paints a very clear picture. The short squeeze pushed price mismatch to late bull market "mania" levels before the blow off today, we are still well above organic levels. pic.twitter.com/U4PeA2zCTH

— Willy Woo (@woonomic) May 17, 2019

The most recent Bitcoin rally starting from early April that sent the price of Bitcoin parabolic has caused price to diverge the farthest from the NVT ratio since the height of the 2017 crypto bubble “mania” according to the indicator’s creator, Willy Woo.

In a new chart shared by the analyst, the divergence is clearly visible. The last time Bitcoin price diverged this far from NVT ratio, the longest bear market on record followed. Nearly every time NVT and price diverged in the past, a large corrective move soon followed.

Does HOLD and FOMO Make NVT a Less Reliable Indicator as Time Goes On?

Bitcoin, while up over 100% from bear market lows has gained too much, too quickly, leading to the asset being overvalued and a mini-parabola formed. The price of Bitcoin has already corrected significantly overnight, via a $1,000 red candle that filled the gaps on CME futures charts. Bitcoin bounced to roughly $7,200 where the price is now struggling to find support.

Related Reading | Why The Next Bitcoin Bull Run Could Eclipse The Last Crypto Bubble

Given how large NVT ratio has diverged from Bitcoin price and the corresponding drop after broken parabola could lead to a nasty drop across the crypto markets. However, FOMO is strong, and interest in Bitcoin is spreading significantly, and with the halving coming up, the demand for BTC may greatly outweigh the supply, and investors holding the asset could be making NVT ratio a less reliable indicator as time goes by and more people learn about cryptocurrencies.

Featured Image from Shutterstock
Tags: bitcoinbitcoin pricecryptoNVTwilly woo
TweetShare
Nexo Logo
BitStarz Player Lands $2,459,124 Record Win! Could you be next big winner? Win up to $1,000,000 in One Spin at CryptoSlots
Tony Spilotro

Tony Spilotro

I'm Tony Spilotro. Behind the pseudonym, I'm a digital media executive and global remote work leader with a decade of content experience and excellent. Here, I explore my newfound passions pertaining to privacy, finance, economics, politics, cryptography, property rights, and other libertarian-esque views. I am a Bitcoin evangelist, maximalist, and educator whenever I can be, helping to spread its message of freedom from government control, monetary policy mismanagement, and passing the buck - literally – to future generations. My journey from a curious retail crypto investor to a serious Bitcoin advocate, trader, and technical analyst is an unusual one, but life-changing nonetheless and has become less about money and more about a long-overdue revolution. While a firm believer in the laws governing math and science, I am profoundly fascinated by the impact of astrology and astronomy including moon and solar cycles and planetary alignment and their ability to influence and potentially predict markets. It hasn't yet clicked for me as to how to put anything to use, but I consider it my current rabbit hole I can't yet dig out of. My perspective of growing up alongside the internet, the dot com era, the Great Recession, and roots in video games collecting coins and rare items caused Bitcoin to immediately make sense to me. Through all of these lenses, I seek to produce content that is educational and entertaining, and I thank you sincerely for taking the time to read what I have to say. Please follow me on Twitter and feel free to drop me a line if you would like to work together.

Related Posts

defi

11 DeFi Projects Rumored to Be Airdropping Tokens

11 hours ago
Nimbus: The Next Big Thing in DeFi

Nimbus: The Next Big Thing in DeFi

12 hours ago
ILCOIN

Age of ILCOIN: A Revolution in The Merger of VR With Blockchain-Based Gaming

13 hours ago
Bitcoin Heads Towards $35,000 as Biden Stimulus Hurts US Dollar

Bitcoin Heads Towards $35,000 as Biden Stimulus Hurts US Dollar

15 hours ago
ACDX

ACDX Introduces the World’s First Crypto Structured Product – A Hybrid of Perpetual Futures & Options

16 hours ago
MicroStrategy Boss: No-One Can Take Your Bitcoin, Not Even The Taxman

MicroStrategy Boss: No-One Can Take Your Bitcoin, Not Even The Taxman

17 hours ago

Premium Partners

Top Brokers

eToro

eToro

Review · Visit
Changelly

Changelly

Review · Visit
Evolve Markets

Evolve Markets

Review · Visit
ArbiSmart

ArbiSmart

Review · Visit
PrimeXBT

PrimeXBT

Review · Visit
Moneta Markets

Moneta Markets

Review · Visit

Top Casinos

BitStarz

BitStarz

Review · Visit
CryptoSlots

CryptoSlots

Review · Visit
mBit

mBit

Review · Visit
CryptoGames

CryptoGames

Review · Visit
Bonusfinder DE

Bonusfinder DE

Review · Visit
Bspin

Bspin

Review · Visit
Wolf Bet

Wolf Bet

Review · Visit

Top Sportsbooks

1xBit

1xBit

Review · Visit

Press Releases

There’s a New Bitcoin Wallet on the Line – Cryonik.io

January 25, 2021

Join PEAKDEFI – a Safer Way to Grow your Wealth

January 25, 2021

Cryptowisser Releases Report on Exchanges With Lowest Fees

January 22, 2021

Newsletter Signup


ABOUT US

NewsBTC is a cryptocurrency news service that covers bitcoin news today, technical analysis & forecasts for bitcoin price and other altcoins. Here at NewsBTC, we are dedicated to enlightening everyone about bitcoin and other cryptocurrencies.

We cover BTC news related to bitcoin exchanges, bitcoin mining and price forecasts for various cryptocurrencies.

COMPANY

  • Advertising
  • Comments Policy
  • Privacy Center
  • Sitemap
  • About Us
  • Contact

Technical Analysis

  • Bitcoin (BTC)
  • Ethereum (ETH)
  • Ripple (XRP)
  • Chainlink (LINK)
  • Cardano (ADA)
  • Tezos (XTZ)

LINKS

Auto Trading Software ▸

Cryptocurrency news

  • Bitcoin
  • Ethereum
  • Ripple
  • Chainlink
  • Cardano
  • EOS
  • Tezos

© 2020 NewsBTC. All Rights Reserved.

  • News
    • Bitcoin
    • Ethereum
    • Ripple
    • Cardano
    • Tezos
    • EOS
    • Chainlink
    • Sponsored
    • Press Releases
  • Analysis
    • Bitcoin (BTC)
    • Ethereum (ETH)
    • Cardano (ADA)
    • Chainlink (LINK)
    • Litecoin (LTC)
    • Tezos (XTZ)
    • Zcash (ZEC)
    • EOS
    • YearnFinance (YFI)
  • Education
    • Accepting Bitcoin payments
    • Using Bitcoin
    • What is Bitcoin Mining
    • How to Trade Bitcoin
    • How to Buy Bitcoin
    • Digital Currency Exchange
    • Proof of Existence
    • Is Bitcoin legal?
    • Bitcoin Books
  • Trading Course
  • Directory
    • Crypto Businesses
    • Bitcoin Brokers
    • Casinos
    • Sportsbooks
  • Trade
  • Gamble +
  • Play Games
  • BUY BITCOIN

© 2020 NewsBTC. All Rights Reserved.

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy Center or Cookie Policy.