Bitcoin’s Advanced NVT Signal: Bullish or Bearish?

Bitcoin recently surged past the $100,000 mark, reaching its highest point since January 2025. While this is exciting, on-chain analysis offers a more nuanced perspective. The Advanced Network Value to Transaction (NVT) ratio, a key indicator of Bitcoin’s valuation, has broken above a significant threshold.

Crypto analyst Burak Kesmeci highlighted this development, suggesting a potential market shift. The Advanced NVT, a refined version of the traditional NVT, calculates the ratio of market capitalization to daily transaction volume. When this metric surpasses its long-term moving average by more than two standard deviations (2xSD), it indicates a decoupling between market cap growth and blockchain activity.

Historically, this has often preceded either substantial price rallies or sharp corrections. Kesmeci’s data shows Bitcoin’s Advanced NVT exceeding the 2xSD threshold. While this isn’t guaranteed to persist, the analyst notes that extended periods above 2xSD frequently foreshadow parabolic price increases, similar to the surge following Spot ETF approvals. However, he cautions that a correction remains a possibility.

What This Means for Investors

This situation presents a crucial juncture for Bitcoin. While the Advanced NVT exceeding 2xSD historically points toward a significant price movement, whether bullish or bearish remains uncertain. Investors should closely monitor this indicator and other market signals to make informed decisions.

Bitcoin Price Overview

Bitcoin reclaimed the six-figure valuation last week for the first time since February. Currently trading slightly above $103,100, it shows a 0.5% increase in the past 24 hours and a 6%+ weekly gain. This upward movement, coupled with the Advanced NVT signal, warrants careful consideration.

Disclaimer: This information is for educational purposes only and is not financial advice. Always conduct your own thorough research before making investment decisions.