(mab) Dynamic Bitcoin NVT SignalBitcoin`s NVT is calculated by dividing the Network Value (market cap) by the USD volume transmitted through the blockchain daily. Note this equivalent of the bitcoin token supply divided by the daily BTC value transmitted through the blockchain, NVT is technically inverse monetary velocity.
Credits go to Willy Woo for creating the Network Value Transaction Ratio (NVT). Credits go also to Dimitry Kalichkin improving NVT and creating the NVT Signal (NVTS).
According to its creator, the NVT Ratio is somewhat similar to the PE Ratio used in equity markets. When Bitcoin`s NVT is high, it indicates that its network valuation is outstripping the value being transmitted on its payment network, this can happen when the network is in high growth and investors are valuing it as a high return investment, or alternatively when the price is in an unsustainable bubble.
I created this indicator because the NVT indicator I was using suddenly stopped working. I tried a number of other NVT indicators, but all of them seem to have the same problem and stopped updating after a certain date. The cause is that the data feed from 'Quandl' that is used by most NVT indicators is no longer updated through the previous API.
Instead TradingView created a special API to access 'Quandl" data. This indicator not only uses the new API for 'Quandl', it can also access data from other providers like 'Glassnode', 'CoinMetrics' and 'IntoTheBlock'. However, the 'Quandl' data feed seems to produce the best results with this indicator.
The indicator provides dynamically adjusting overbought and oversold thresholds based on a two year moving average and standard devition with adjustable multipliers. It also implements alerts for NVT going into overbought, oversold or crossing the moving average.
Version 1.0
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Version history
0.1 Beta
- Initial version
1.0
- First release
Nvtsignal
Daily Network Value to Transactions Signal (NVTS)
Quote of GlassNode ...
The NVT Signal (NVTS) is a modified version of the original NVT Ratio.
It uses a 90 day moving average of the daily transaction volume in the denominator instead of the raw daily transaction volume.
This moving average improves the ratio to better function as a leading indicator.
The Network Value to Transactions (NVT) Ratio is calculated by dividing the market cap by the transferred on-chain volume measured in USD.
GlassNode says the NVT Ratio was created by Willy Woo.
I have peaked into Glassnode and took their idea.
I also added a few more Moving Averages to select from, and the length can also be changed.
This script does not depend on Glassnode alone, instead I pulls data of several services...
CoinMarketCap
CoinMetrics
GlassNode
IntoTheBlock
Therefor we have more Tokens to select from.
I have also blocked some faulty data of each service.
If you get a study error of any kind then there is no data available,
or you on a wrong timeframe.
Best to use this script in a daily chart.
And keep in mind it pulls data of yesterday.
Therefor the plot is offset by 1 to the left.
The script will check each service if the data for the chart is available.
Market Cap is taken in the following order ...
CainMarketCap
GlassNode
CoinMetrics
Transaction volume as USD is taken in the following order ...
IntoTheBlock
CoinMetrics
GlassNode
Happy Trading!
NVTNetwork Value to Transactions Ratio (NVT) is defined as the ratio of market capitalization divided by transacted volume.
NVT Ratio can be thought of as an indicator that measures whether the blockchain network is overvalued or not.
If it is upper than red line, it means overvalued.
NVT Golden Cross targets to generate short or long signals by comparing the short-term trend of NVT and the long-term trend of NVT. If the short-term trend is way greater than the long-term trend is, the network can be interpreted as overpriced and will soon revert to mean value, meaning short signal. Similarly, the opposite case may imply a long signal.
Over the red line is short signal and under the green line is long signal.
You can find divergence in this indicator.
There are two sources
cryptocap
glassnode
QuantNomad - Bitcoin NVT/NVTSIn this script I included 2 quite interesting indicators for Bitcoin:
* NVT (Network Value to Transactions Ratio)
* NVTS (NVT Signal)
Both indicators are based on Bitcoin Network Value (Market Cap) and 24h transaction volume.
For both these values I'm using Quandl datasets from Blockchainc.com:
market_cap: QUANDL:BCHAIN/MKTCP
transac_vol: QUANDL:BCHAIN/ETRVU
Calculation for both indicators are pretty simple:
NVT = median(market_cap / transac_vol, 14 bars)
NVTS = market_cap / sma(transac_vol, 90 bars)
NVT and NVTS are cryptocurrency's answers to P/E ratio. They can help you to understand if bitcoin is under/overvalued.
When NVT or NVTS is relatively high it can be a pretty good point to short bitcoin, if it's low it good time to buy bitcoin.
NVT Ratio - was created by Willy Woo
NVT Signal - was created by Dimitry Kalichkin
Because of different sources of transaction volume data, these indicators can differ in values from originals, but magnitude should be the same.
This is a pretty simple example where you can select only static overbought/oversold levels and when indicator will be above/below it you will see in changing in color.
I have many more things in my head how these indicators can be developed further and what strategies can be derived from them, but as is they can be a pretty good base for you. Will share my advanced findings later.
NVT Dynamic Colored with Signals [aamonkey]NVT Dynamic
This is the dynamic version of my " Bitcoin Network Value to Transactions " indicator.
The dynamic NVT indicator is based on the Network Value to Transactions.
Definition:
NVT = Network Value / Daily Transaction Volume
Advantages:
Because BTC is a very young asset, it can be a good idea to have relatively high and low NVT values that change over time.
Signals:
When the NVT turns green = buy opportunity
NVT turns red = sell opportunity
Dynamic Range NVT SignalABOUT DYNAMIC RANGE NVT SIGNAL
NVT Signal (Credit: Willy Woo and Dmitry Kalichkin) is akin to a "PE" ratio for Bitcoin , and can be used to identify when Bitcoin is overbought or oversold based on the relative value of transactions sent across the network.
This indicator includes a 2 year moving average and standard deviation to identify outlier values, instead of declaring a static high-low range for relative valuation.
THEORY
A dynamic "high-low" range was chosen for the following reasons:
- Bitcoin is only 10 years old, it is likely that relatively "high" and relatively "low" NVT values will change with time, as have PE ratios over the last century.
- Some transactions are now made off-chain (eg. Liquid Network's private side-chain which is used by many major exchanges). If this trend continues, we can expect "normal" NVT ranges to increase with time (as the relative portion of public on-chain transaction values decreases).
CALCULATION
- NVT = Circulating Market Cap / 90 average On-chain Transaction Value*
- Overbought (default): NVT > 2-year mean + 2*standard deviations. I.e. NVT Signal is in the top 2.5% of values for the prior 2 years.
- Oversold (default) NVT < 2-year mean - 0.5 * standard deviations.**
*Data source: Blockchain.info, estimated transaction value does not include returned to sender as change.
**Oversold under 2-year mean was chosen due to the skewness of NVT Signal, it is not normally distributed. For example: NVT Signal has never been less than the 2-year mean - 2* standard deviations. This may change in the future.
NOTES ON USAGE
- Use with care. Bitcoin can remain "overbought" or "oversold" for extended periods (eg. 2015-2016).
- As Bitcoin ages, the validity of NVT Signal will need to be monitored. Particularly with respect to potentially increasing use of side-chains, private transactions and potentially the lightning network.
- It is likely that a 2-year “look back period” for calculating mean and standard deviation will not be sufficient in the decades to come. As Bitcoin matures and stabilizes (some time in the future), a longer "look back period" should probably be used. To allow for this, the defaults for this indicator can be easily adjusted.
NVT (original) - Network Value to TransactionsI'm reposting the NVT indicator that was originally available for public use in TradingView.
NVT Signal is a Bitcoin-specific study to get a view on data flowing through the blockchain.
It has been used to predict tops in Bitcoin price.
I've set up this indicator for it to be possible to base the calculations on custom:
Transaction Periods
Overbought levels
Oversold levels
The indicator plots in any BTCUSD spot, futures, BLX index and BTCEUR.
It paints in intraday time frames, but Daily time frame is the correct one to interpret the 'official' read of it.
For that reason, I've enabled by default an option that forces the NVT to display the Daily value even though the time frame could be higher or lower.
Please consider unchecking this setting if you'd like to experiment with another type of reads (i.e. in weekly time frame).
Additionally, it allows the following settings:
Signal Line Plot . Added the possibility to plot a Signal Line based on EMA.
Signal Line Cross . Show/Hide Crosses with the Signal Line.
Alerts based on Signal Line . Predefined Tradingview Alerts on the Cross of the Signal Line.
OverBought Background . Highlight the background based on OB Condition.
OverBought Alert . Predefined Tradingview Alerts based on OB Condition.
OverSold Background . Highlight the background based on OS Condition.
OverSold Alert . Predefined Tradingview Alerts based on OS Condition.
Please check our blog article showing multiple practical ideas about trading the NVT indicator: medium.com
Credit for this idea goes to Willy Woo woobull.com
and Dmitry Kalichkin twitter.com
🔗 Blockchain Rhythms by Cryptorhythms🎼 Blockchain Rhythms v1.0 by Cryptorhythms
This indicator and data plot suite is for bitcoin BTCUSD analysis over longer periods and higher time frames. 🚨For this to plot anything you must use on Daily or higher timeframe🚨 .
You want to have an alternative to the typical technical indicators you see everywhere? This is it. Seen crypto twitter talking about/using all sorts of indicators you have never seen before on tradingview? Here you go. Are you a long term investor and not a short term speculator?... I think you get the picture...
With the wealth of data here, I cannot go into a fully detailed analysis for every indicator. Please make liberal use of google and as always DYOR before trading on a system you have never used.
These indicators are best observed versus a logarithmic price scale. If I have missed any indicators you think should be in here let me know! Let me preempt that by saying MVRV and UTXO Age Distribution are not possible to create on Tradingview at this time.
🚧Error Screen:
If you see this you need to choose a data-point or indicator to plot!
⌚If you are loading this indicator with alot of chart history shown (as in the example screenshots) it may take up to a minute to load.
Please note: some of the screenshots below show chart title plots which I subsequently had to remove due to limitations. If you would like a title for all the plot, simple use the Indicator Labels checkbox option located in the scales tab of chart settings.
[b📊 Fundamental Blockchain Indicators
NVT Signal & Ratio
Both are related. NVT / NVT Signal can be interpreted as the strength of market confidence in the means of payment / settlement layer narrative. A “measure of the chain’s strength as a payment network compared to its market value — a low NVT may suggest that a network is undervalued compared to the service it is providing as a settlement layer” (Matteo Leibowitz).
💰NVT Ratio:
NVT Ratio (Network Value to Transactions Ratio) is similar to the PE Ratio used in equity markets.
When Bitcoin`s NVT is high, it indicates that its network valuation is outstripping the value being transmitted on its payment network, this can happen when the network is in high growth and investors are valuing it as a high return investment, or alternatively when the price is in an unsustainable bubble.
🚦NVT Signal:
NVT Signal (NVTS) is a derivative of NVT Ratio created by Dimitry Kalichkin. This indicator provides more emphasis on predictive signaling ahead of price peaks.
🚀Bitcoin Velocity
Velocity is a measure of how quickly money is circulating in the economy. Is bitcoin trending towards savings or payments? This can help you decide. It is similar to Bitcoin Network Momentum, except this takes into account bitcoins increasing supply.
🏃Bitcoin Network Momentum
Network Momentum is a view created by PositiveCrypto which looks into the value transmitted through the Bitcoin blockchain denominated in BTC value plotted against Bitcoin's price. It serves as a leading indicator to bitcoin price, in that we need high levels of value throughput to drive the bull market. This indicator is experimental.
Both daily transaction values and price exhibit cyclical patterns, but not in sync with each other. A hypothesis to explain the mismatch is that short-term mindset traders (using exchanges) heavily influence price; but long-term mindset investments (more likely to be directly recorded on-chain) have a greater contribution to the daily transaction value recorded in the ledger.
An alternative to the NVT / NVT Signal - tracks the relationship between Bitcoin’s price and BTC volume flowing through the blockchain network.
Ⓜ Mayer Multiple
Introduced by Trace Mayer as a way to gauge the current price of Bitcoin against its long range historical price movements (200 day SMA by default), the Mayer Multiple highlights when Bitcoin is overbought or oversold in the context of longer time frames.
It`s worth noting as the market becomes larger and less volatile, the peaks are becoming less exaggerated. This is because a 200 day moving average baseline is a static yardstick against an ever growing, more stable, Bitcoin market. We should eventually re-calibrate what constitutes the overbought/oversold extremes on this chart accordingly.
A more fully featured Mayer Multiple version available here:
💲 BTC Marketcap and Thermocap
We are all familiar with marketcap, but it does come with its disadvantages.
A more appropriate measure of network value was recently put forth by Nic Carter. Remember capital flows in crypto generally do not come in via exchanges (miners notably like to sell OTC). Every buy in an exchange is matched by a sell. Money that comes in = money that goes out.
True inflows (in Bitcoin, at least) are the aggregate of resources spent by miners¹. And a good proxy for that is the amount these folks are earning back from networks they support in return for their investments. That’s aggregate security spend (or Thermocap): what was actually paid out to miners (transactions * their price in USD at the time they were mined).
There is an option to deduct lost coins, genesis (Satoshi's) coins, and dead HODL'ers coins from the marketcap. This information was taken from ChainAnalysis' 2017 report
This shows both plots for comparison on a logrithmic scale:
⛏Mining Indicators & Data
⛏ Petahash Dollar Ratio
Bitcoin’s Hashrate (Daily PetaHashes) to Daily Mining Earnings (PetaHashDollar) is a robust metric to asses the day to day mining profitability. In addition, when plotted over the past five years, its overall trend represents a good way to quantify and visualize the relative progress in efficiency of ASICs (more specifically the inverse of that metric: 1/relative mining efficiency).
⛏Unmined Coins Marketcap
A simple statistic I created to plot the value of the unmined BTC still waiting to be extracted. If you find any interesting value for analysis please message me and let me know.
⛏Percentage of Total BTC Mined
I hope this one doesnt need an explanation. 😅
#️⃣ Network Hash Rate
A network's hashrate is the most important data point in blockchain tech. It indicates to the world how secure its network is. The hashrate is the "bridge" between the analog world, and the digital world. Essentially, the hashrate describes how much computing power (called hashing power in blockchain speak) is being thrown at the network, by users all across the world. These "miners" are running servers with dedicated processing chips to solve random, cryptographic math problems. The reason miners do this constant computing is that it betters their chances to reap a "block reward." The block reward entitles them to:
1.)Newly "mined" coins, and
2.)Transaction fees
Both of these are typically paid out with each new block. This rewards miners for their “proof-of-work.” It signals to the world that real "work" and resources, like electricity, have been spent on the Bitcoin network.
As more and more miners compete for the block reward, the hashrate, mining calculations and block difficulty will increase. This increase in the network's hashrate over time means an increase in the network’s security. Much better detail on this is available elsewhere, but primarily, this process solves digital money's vulnerability to attacks and the "double spend" problem.
I like to plot it directly on the price chart (click on the indicator and drag it up)
⛏ Revenue Per Transaction
A chart showing miners revenue divided by the number of transactions.
Fee Per Block Kilobyte
A measure of how much it costs per kilobyte of blockchain block size.
⛏Return Per TeraHash (TH)
Revenue per TH of mining hash power.
Can also be plotted on price chart and looks nice:
Cost Per TX (CPT) and Cost % Per TX Volume
CPT - A chart showing miners revenue divided by the number of transactions
C%PRV - A chart showing miners revenue as percentage of the transaction volume
Blockchain Statistics & Data Plots
🏋Network Difficulty
A relative measure of how difficult it is to find a new block. The difficulty is adjusted periodically as a function of how much hashing power has been deployed by the network of miners.
I like plotting this one on price chart as well:
Daily Output Value
The total value of all transaction outputs per day (includes coins returned to the sender as change).
🔢Number of Unique Addresses Used
Addresses are kind of like bank accounts.
Unlike bank accounts, addresses on the blockchain can be generated by anyone, anywhere and one single person could have thousands.
The plot shows bitcoins growth of addresses which are both unique and active per day, smoothed out over 14 days for clarity (using a zero lag ema). As you can see bull runs typically lead to more unique addresses the assumption being that more new money is drawn into the market due to the news cycle.
This is another one I prefer to plot on the price chart.
🔢Number of Transactions (NoTX) and NoTX - Exchange Wallets
Number of TX's on the chain (green line) and NoTX minus (-) Exchange Wallets (blue line).
⏳ Median Confirmation Time
The median time for a transaction to be accepted into a mined block and added to the public ledger (note: only includes transactions with miner fees). Displayed in minutes.
🔊Volume Dominance (Liquidity to Transaction Volume Ratio)
Volume Dominance is another metric I invented simply to show the ratio between spot exchange TXs (liquidity/speculation) and blockchain TXs (utility/HODLing). Its shows percent of volume attributed to blockchain TXs.
🙃 We REALLY hope you enjoy and find this indicator useful. I certainly enjoyed creating it and learned quite a bit myself manipulating the data! I welcome any suggestions or ideas you may have to further extend, or create new indicators.
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Bitcoin - NVT and Velocity [NeoButane]Different Bitcoin studies that include more than price. Averaging types are arithmetic, geometric, logarithmic, and something that's supposed to be harmonic.
This has:
NVT Ratio
NVT Signal
Velocity
Sources:
NVT - medium.com
Velocity - charts.woobull.com
