NVT Ratio & Signal

NVT plots two lines on a shared logarithmic right axis. The thinner line is raw NVT — market cap divided by today’s on-chain volume in USD. The thicker line is NVT Signal, market cap divided by a 90-day moving average of that volume. Tinted bands mark the under-45 undervalued zone and the over-150 overvalued zone; everything between is the normal band. Price runs muted on the log left axis for cycle context.

Today’s NVT Signal is 226.3; raw NVT is 190.4; the regime read against Kalichkin’s canonical thresholds is Overvalued. The implicit market cap at $78,199.03 spot is $1.5T; the 90-day SMA of on-chain volume sits near $8.0B.

Willy Woo introduced raw NVT in early 2017 as “Bitcoin’s P/E ratio” — market cap (price × circulating supply) divided by daily on-chain volume in USD. The intuition is direct: if the market is paying a hundred dollars of valuation for every dollar of utility flowing through the network in a day, the ratio is high; if it is paying ten, the ratio is low. The framework was structurally defensible and operationally noisy. Daily on-chain volume jumps an order of magnitude on event days; raw NVT inherits that volatility one-for-one.

Dmitry Kalichkin published Rethinking NVT Ratio: introducing the NVT Signal on 4 February 2018 with a single change: substitute a 90-day moving average of on-chain volume for the same-day denominator. The smoothing serves two purposes. First, it suppresses single-day volume bursts that would otherwise drag the ratio down without any change in the underlying utility/value mix. Second — and more importantly — it gives the ratio a memory: the denominator reflects the last quarter of network activity, not just today’s blocks. The smoothed line reads cycle phases as extended regimes rather than as daily flickers.

The trade-off is responsiveness. The 90-day SMA introduces a quarter-cycle of lag at regime turns; signal at the actual cycle low typically arrives two to three months after price has already turned. NVT Signal is a regime gauge, not a turning-point indicator. The chart shows both lines so the reader can see the noisy-but-fast and the smoothed-but-lagged reads alongside each other; we use NVT Signal for the regime label because the alternative is operationally unusable.

For every day d with both a price close and a non-zero on-chain volume reading:

market_cap(d) = price(d) × circulating_supply(d)
NVT(d) = market_cap(d) / tx_volume_usd(d)
NVT_Signal(d) = market_cap(d) / SMA(tx_volume_usd, 90)(d)

The market-cap numerator uses the protocol’s halving schedule for circulating supply — the same series that drives the daily issuance chart. The denominator is the network’s estimated on-chain transaction volume in USD — a quantity that excludes most change outputs but does not net out exchange-internal transfers, mixer noise, or batched custody flows. The 90-day SMA is a simple unweighted mean over the trailing window; the chart begins after that warm-up so neither line has a discontinuity.

The reading row recomputes both ratios against live spot — the market-cap numerator scales with the BTC price through the day while the 90-day SMA denominator stays anchored to the latest available baked row. The cycle-anchor table below uses the daily-close pricing for cross-cycle consistency. Methodology and the on-chain-volume reconciliation choices are documented on the methodology page.

Reading NVT Signal at canonical cycle dates is the cleanest summary of how the ratio has moved across regimes. The 2017 cycle top printed 322.6, the 2021 top printed 273.1, and the 2022 post-FTX low printed 131.4 — the first cycle low in our data that did not fall into the Undervalued band. The 2024 halving day registered 136.0, a post-halving entry that already sat in the upper Normal band.

The chart uses Kalichkin’s canonical NVT Signal thresholds directly: 45 for the undervalued boundary and 150 for the overvalued boundary. That keeps the visual bands aligned with the original NVT Signal framework and with the common reference used by market data providers.

The caution is provider comparability. NVT depends on how on-chain volume is cleaned: adjusted-volume frameworks net out change outputs and some exchange self-transfers, while raw-volume frameworks can read differently. The bands here are canonical, but absolute readings across providers still need a volume-method check before you compare them one-for-one.

The honest version of this paragraph is the one most third-party NVT charts do not write down. If you compare our reading to one on a different framework and the numbers differ by a factor of two, the framework is the explanation, not a data error. Layer-2 migration is a second open question on the framework: as Lightning, sidechains, and federated systems absorb more payment activity, the on-chain volume denominator shrinks for reasons that have nothing to do with utility loss, which mechanically pushes NVT readings higher in the late-2020s than they would otherwise be.

The most common misuse of NVT is to treat readings near the threshold rails as entry triggers. The chart’s post-2014 history records a handful of legitimate “extreme” signals at each end of the band; their precision is informative.

Top extremes. The five highest NVT Signal readings on record are clustered around the 2013 and 2017 cycle tops, with NVT Signal printing above 350 multiple times in each. Each clustering preceded the actual price top by weeks to months and stayed elevated through the early descent — a slow-moving warning signal, not a sell trigger. The 2021 cycle top printed a maximum NVT Signal of 273 on the cycle-top day itself, materially below 2013 and 2017 readings, which is consistent with the broader cross-cycle observation that successive cycles have produced lower volatility extremes on most ratio-based gauges.

Bottom extremes. The lowest NVT Signal readings cluster in late 2011, with prints below 20 — a regime that has not repeated since. The 2014–15 and 2018–19 bears each produced extended periods in the canonical undervalued band; the 2022 bear did not. The signal’s decay across cycles at the bottom mirrors its decay at the top: extremes are getting narrower, partly because of cycle maturity, partly because the on-chain volume denominator has decoupled from underlying user activity.

For an investor. Treat NVT Signal as a regime gauge, not a timing signal. The Undervalued band has correctly identified extended buy windows three times and missed each cycle low by months; the Overvalued band has identified late-cycle euphoria three times and given several weeks of warning at each top. Useful for position sizing, useful for sanity-checking late-cycle exuberance, weak as an entry trigger. Pair with the MVRV ratio for a profit-position cross-check, and with realized price for the cohort-cost-basis cross-reference.

For a researcher or analyst. The cleanest contribution this chart makes is the cross-cycle observation that NVT extremes are narrowing: each successive cycle’s top and bottom prints sit closer to the Normal band than the prior cycle’s. The 2022 bottom never reached Undervalued. Whether that compression reflects market maturity, on-chain volume drift due to L2 migration, or a regime change in how Bitcoin trades is a research question this chart records but does not answer. The cycle-anchor table is the cleanest cross-section to start from.

For a long-term holder. The chart is a slow read of whether the market is paying a reasonable price for the network’s on-chain utility. It does not capture Layer-2 utility (Lightning, sidechains), which means the late-2020s NVT readings are biased upward against earlier cycles. Use it for cross-cycle context, not absolute valuation. The daily issuance and transaction count companion charts triangulate the underlying-utility question from different angles.

The denominator drifts with Layer-2 migration. NVT counts base-layer on-chain volume only. As Lightning, Liquid, Rootstock, federated bridges, and large-custody batching absorb more payment activity, the denominator shrinks for reasons that have nothing to do with utility decline. A structurally rising NVT Signal in calm regimes is consistent with both “market overvalued” and “denominator under-counted” — the chart does not distinguish them.

Inscription waves inflate the denominator. Ordinals and Runes activity packs many small data-carrying transactions into blocks. Some of that activity is reflected in on-chain volume in USD; most of it is not pure payment volume. NVT Signal during the 2023–24 inscription periods reads lower than payment-only utility would suggest, because the denominator is inflated by metadata transfers. The 90-day SMA partially absorbs single-day events; sustained inscription regimes still bias the read downward.

Volume methodology is provider-specific. The 45/150 bands are canonical, but the NVT Signal reading still depends on the transaction-volume series beneath it. Do not compare absolute NVT Signal levels across providers without checking whether each source uses raw or adjusted on-chain volume.

Single-day raw NVT is volatile. The raw line spikes when same-day on-chain volume falls below its quarterly average, even if utility is unchanged in any meaningful sense. Use NVT Signal for regime calls and the raw line only for transparency or for events too short for the SMA to register. Treat raw-NVT prints as headline-only context.

Cross-cycle decay is a real finding. The 2022 cycle low printed an NVT Signal in the Normal band, breaking a pattern from the 2014–15 and 2018–19 lows. Treating that as “the chart is broken” misses the underlying observation: cycles are getting smaller in ratio space across multiple metrics, not just NVT. The chart records the pattern; it does not explain it.

Canonical questions from Google’s “People also ask” for bitcoin nvt, kalichkin nvt signal, and bitcoin price to earnings, answered against the data on this page.