Trouble in Wonderland

Chart of the Day

Over the past weekend, and in spite of the light trading volume caused by the fact that most Asian markets are heading into a week-long Lunar New Year holiday season, BTC experienced a 2.5% downside correction. In a similar vein, ETH is also down 2.5% from 24 hours ago, and is currently stabilizing just above the $2,500 level (as of the time of writing). Most major altcoins have also flipped red, and are, on average, down 3-5% over the same time period. With that being said, however, on-chain metrics do still suggest that BTC remains in the oversold territory. The Network Value to Transaction (NVT) ratio, an estimation of market value based on on-chain volumes, projects that BTC is currently lying in-between the 28-day and 90-day "fair value" zones. The 90-day NVT premium, however, is trapped within the zone of historical macro undervaluation, and suggests that a relief rally may very well be on the cards in the near-term. This, when viewed in tandem with the fact that an increasing percentage of circulating BTC supply has been turning illiquid in recent times, bodes well for the number one cryptocurrency by market cap indeed. On an even brighter note, the monthly NFT trading volume has also reached a record high of $6.13 billion, as new marketplaces like LooksRare seem to be rising to the occasion to challenge OpenSea’s dominance.