Bitcoin (BTC) is “cheap” in relative value in 2023, according to one on-chain indicator, despite its recent price rally.
Bitcoin’s NVT (Network Value to Transaction) is down 60%, even as the price rose 68% year-to-date. NVT is a ratio of the market capitalization of an asset to its network transfer volume.
Bitcoin’s current NVT is 36.18, just below its one-year average of 36.40. The figures for 30 days, 60 days, 90 days, and 180 days are all in the range of 44 to 49, deviating from the annual average.
The reason for the decline in NVT is that bitcoin transactions have exceeded the actual price increase. Brisk trading indicates bullish sentiment, but above actual price gains means Bitcoin is trading at a bargain.
Bitcoin’s NVT has been on a downward trend since December 2022.
Ethereum (ETH) has shown a similar move, with its NVT down 68% while its price is up 51% year-to-date.
Ethereum’s current NVT is 19% lower than its annual average, making it larger than Bitcoin.
｜Translation: coindesk JAPAN
｜Editing: Takayuki Masuda
｜Original: On-Chain Indicator Suggests Bitcoin, Ether Are Trading at a Discount
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