In-depth analysis of the Bitcoin NVT indicator: rebounded from a low of -0.58 to -0.32, on-chain valuation is being reconstructed

【Chain Wen】A recent interesting phenomenon worth noting is that Bitcoin’s valuation is undergoing a reset.

By using the NVT Golden Cross indicator (smoothed based on the 100-day moving average), we can understand the relationship between market value and on-chain economic activity. Simply put, NVT is Bitcoin’s price-to-earnings ratio, replacing earnings with transaction volume to assess whether the network’s market cap aligns with actual economic activity.

The current situation is quite intriguing—short-term NVT is significantly below the long-term trend, indicating that Bitcoin is undervalued relative to on-chain activity. Historically, whenever this indicator shows a deep negative deviation, it signals low market sentiment and severe underestimation of the network. During this cycle, the indicator once dropped to a historical extreme of -0.58, and has now rebounded to about -0.32, suggesting that prices are gradually reconnecting with transaction-driven fundamentals—though still at a conservative valuation level.

This phenomenon typically occurs during deleveraging and risk-avoidance phases, after which the market enters an accumulation period, ultimately leading to more rational price discovery. From the current signs, the market is transitioning from deep undervaluation to balance, with capital activity becoming more selective, which could be a precursor to structural improvements and long-term opportunities in the crypto market.