Bitcoin’s NVT Golden Cross Signals Potential Undervaluation Easing Amid Recovery Signs

• Bitcoin NVT Golden Cross rises from -0.58 to -0.32, showing partial recovery while remaining undervalued against network usage.

• Institutional demand softens, with US ETFs offloading 24,000 BTC in Q4 2025, similar to pre-2022 bear market trends.

• Bitcoin trades below its 365-day moving average, with low funding rates pointing to bearish conditions but limited downside near $56,000 support level.

Discover how the Bitcoin NVT Golden Cross signals recovery from undervaluation amid declining demand. Explore key metrics and implications for investors in this detailed analysis. Stay informed on Bitcoin’s market shift today.

What is the Bitcoin NVT Golden Cross and How Does It Signal Recovery?

The Bitcoin NVT Golden Cross is a key on-chain metric that compares Bitcoin’s market capitalization to its network transaction volume, helping investors assess whether the asset is overvalued or undervalued relative to its utility. When the short-term NVT ratio crosses below the long-term average, it indicates undervaluation, often preceding accumulation phases. In the current cycle, this signal has improved from a deep -0.58 deviation to -0.32, suggesting a transition toward equilibrium as demand patterns evolve.

How Does Declining Institutional Demand Impact Bitcoin’s Valuation?

Declining institutional demand is a critical factor pressuring Bitcoin’s valuation, as evidenced by US spot Bitcoin ETFs reducing holdings by 24,000 BTC during Q4 2025. This outflow mirrors patterns observed prior to the 2022 bear market, where addresses holding 100 to 1,000 BTC exhibited below-trend growth, signaling reduced accumulation activity. CryptoQuant data highlights three major demand waves since 2023—fueled by ETF launches, election outcomes, and treasury strategies—but the latest contraction underscores a shift toward caution. Expert analyst MorenoDV_ notes, “The present setup points to a market transitioning from deep undervaluation toward equilibrium, a phase historically associated with accumulation.” Short sentences like these emphasize the structural nature of this undervaluation, driven by risk aversion rather than fundamental flaws in Bitcoin’s network. Supporting statistics from on-chain analytics show transaction volumes stabilizing despite the price dip, reinforcing the metric’s reliability. This environment encourages selective capital allocation over broad buying, as investors await clearer bullish signals. Furthermore, the NVT Golden Cross’s negative reading, though improving, reminds market participants that Bitcoin remains priced conservatively against its proven transaction utility, a dynamic that has historically rewarded patient holders during recovery phases.

Frequently Asked Questions

What Does the Current Bitcoin NVT Golden Cross Reading Mean for Investors?

The current Bitcoin NVT Golden Cross reading of -0.32 indicates partial recovery from extreme undervaluation, suggesting Bitcoin is still cautiously priced relative to network activity. Investors should view this as a potential accumulation opportunity, similar to past cycles, but monitor institutional flows closely to confirm sustained demand rebound.

How Might Low Funding Rates Affect Bitcoin’s Short-Term Price Movement?

Low funding rates on perpetual futures, at their lowest since December 2023, reflect reduced risk appetite and bearish sentiment in Bitcoin’s derivatives market. This setup typically leads to sideways or downward price action in the short term, but with support at $56,000, it could stabilize trading without extreme volatility, allowing for natural accumulation.

Key Takeaways

• NVT Golden Cross Improvement: The metric’s rise to -0.32 signals easing undervaluation, highlighting a shift from deep discounting to selective accumulation in Bitcoin’s market.
• Institutional Demand Trends: US ETFs’ 24,000 BTC reduction in Q4 2025 echoes pre-bear market caution, with on-chain data showing slowed growth in mid-sized holder addresses.
• Limited Downside Risk: Bitcoin’s position below the 365-day average and near $56,000 realized price suggests contained drawdowns, offering a strategic entry point for long-term investors.

Conclusion

The Bitcoin NVT Golden Cross continues to provide valuable insights into the asset’s valuation amid softening institutional demand and bearish market signals. As the metric edges toward equilibrium, it underscores Bitcoin’s resilience during periods of risk aversion, with historical precedents pointing to eventual recovery. Investors monitoring declining ETF holdings and low funding rates should prepare for potential stabilization around key supports, positioning themselves for the next demand cycle with informed, patient strategies.