NVT Ratio
Network Value to Transaction (NVT) Ratio describes the relationship between market cap and transfer volumes.

# Indicator Overview

Network Value to Transaction (NVT) Ratio describes the relationship between market cap and transfer volumes. It is considered analogous to the PE (price to earnings) Ratio used in equity markets.
When NVT is high, this indicates that the network value is outpacing the value being transferred on the network. This could represent legitimate growth stages, or a potential price bubble. Conversely, when NVT is low, this means that network value isn't keeping up with increased usage of the network, potentially representing bearish sentiment.

# How is it measured?

NVT is calculated by dividing market cap (in USD) by daily transfer volume (in USD).
\begin{align*} \textrm{NVT Ratio} &= \frac{\textrm{Market Cap}~{\color{gray}{[\textrm{USD}]}}}{\textrm{Transaction Volume}~{\color{gray}{[\textrm{USD}]}}} \\[0.5em] &= \frac{ \textrm{value} \cdot \textrm{price}~{\color{gray}{[\textrm{USD}]}}~{\color{gray}{\textrm{(of all UTXOs)}}} }{ \textrm{value} \cdot \textrm{price}~{\color{gray}{[\textrm{USD}]}}~{\color{gray}{\textrm{(of all spent outputs)}}} } \end{align*}