Here is an up-to-date look at Bitcoin’s NVT ratio for all of Samsa’s traders. By comparing each month’s average market cap to its transaction volumes (in $USD), we can see that we are over the average NVT by a wide margin currently.
We ideally want to see the NVT ratio fall below its average, which we haven’t seen since early January. This is when we typically see the large upswing bursts in Bitcoin’s price.
There are obviously exceptions, but this chart generally indicates fairly accurately whether Bitcoin is currently overvalued or undervalued from a transactional perspective.
How to read these NVT charts:
-Blue transparent bars show the average price of BTC for the given month
-Solid yellow line shows the average NVT over time
-Multicolored area chart shows the actual average NVT of each month.
We want to see NVT fall under the yellow line and be in the yellow-green/green range.
Read more about how to use NVT as a valuation metric in our latest article on Hacker Noon [https://hackernoon.com/network-value-to-transactions-ratio-cryptocurrencys-answer-to-p-e-c3743e700929](https://hackernoon.com/network-value-to-transactions-ratio-cryptocurrencys-answer-to-p-e-c3743e700929) by Brian Quinlivan
*charts created by Samsa.ai, raw data from coinmetrics.io
We recently published an article about how pump and dumps function with stocks, and with cryptocurrencies. The goal of this article is to help cryptocurrency investors better understand what they are up against in this young and unpredictable market. We outlined the process behind a stock pump and dump, and the many ways a pump and dump can occur with cryptocurrencies. We also took the time to explain why criminals, stock promoters and other hostile actors are now favoring cryptocurrencies for price manipulation schemes.
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