CryptoQuant: BTC valuation reset is underway, and the market is gradually returning to fundamentals.
PANews reported on December 19th that, according to CryptoQuant analyst MorenoDV, a Bitcoin valuation reset is underway. By observing the Bitcoin NVT golden cross indicator (smoothed by a 100-day moving average), the relationship between market valuation and on-chain economic activity can be assessed. NVT is considered Bitcoin's price-to-earnings ratio, where trading volume substitutes for earnings, answering the question of whether network market capitalization matches actual economic activity.
The current NVT golden cross indicator shows that the short-term NVT is significantly lower than the long-term trend, indicating that Bitcoin's market value is discounted relative to on-chain activity. Historically, when the indicator deviates deeply from its value, it usually reflects weak market sentiment and structural undervaluation of the network. During this cycle, the indicator fell to a historical low of -0.58 and has since recovered to approximately -0.32, showing that the price is gradually realigning with trading-driven fundamentals, but remains within a conservative valuation range.
This phenomenon typically occurs during deleveraging and risk aversion phases, followed by a period of market accumulation that drives healthier price discovery. The current market is transitioning from deep undervaluation to equilibrium, with increased fund selectivity, potentially indicating structural improvements and long-term opportunities in the crypto market.
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