Bitcoin’s Network Value-to-Transaction (NVT) ratio reached an all-time high on July 20. The NVT indicator is often compared to the price-to-earnings (P/E) indicator for stocks, which is used for fundamental analysis.

As observed, Bitcoin’s seven-day NVT ratio is at 231 considering a $36.5 billion transaction volume at $66,500. In 2021, the Network Value-to-Transaction peaked at 58 with BTC trading at $44,800 and $106.92 billion transacted on-chain.

This is a direct result of an aggressive increase in the BTC price, which was not followed by network activity. In summary, the cryptocurrency price is rising while Bitcoin’s transaction volume is holding at historically low levels.

Therefore, this suggests a mostly speculative demand for an asset without a proportional organic demand and could hint at an impending correction if the network activity does not pick up.

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