CryptoQuant: BTC valuation reset underway, market gradually returning to fundamentals

PANews, December 19 — According to CryptoQuant analyst MorenoDV_, a valuation reset for bitcoin is underway. By observing the bitcoin NVT Golden Cross indicator (smoothed by the 100-day moving average), it is possible to assess the relationship between market valuation and on-chain economic activity. NVT is regarded as bitcoin’s price-to-earnings ratio, where transaction volume replaces earnings, aiming to answer whether the network’s market capitalization aligns with actual economic activity.

Currently, the NVT Golden Cross indicator shows that the short-term NVT is significantly below the long-term trend, indicating that bitcoin’s market value is discounted relative to on-chain activity. Historically, when the indicator deviates deeply into negative territory, it typically reflects bearish market sentiment and structural undervaluation of the network. In this cycle, the indicator dropped to a historic low of -0.58 and has now rebounded to around -0.32, suggesting that the price is gradually realigning with transaction-driven fundamentals, but still remains within a conservative valuation range.

This phenomenon usually occurs during deleveraging and risk aversion phases, after which the market enters an accumulation period and drives healthier price discovery. The current market is transitioning from deep undervaluation to equilibrium, with more selective capital allocation, which may signal structural improvement and long-term opportunities in the crypto market.