# NVT Golden Cross

## Definition

NVT Golden Cross (NVT\_GC) is a [Bollinger-band](https://en.wikipedia.org/wiki/Bollinger_Bands)-like signaling indicator based on NVT, defined as the following equation.

$$
\text{NVT} = \frac{\text{Market Cap}}{\text{Transaction Volume}} \\
\text{NVT\_diff} = \text{NVT (10 days moving average)} - \text{NVT (30 days moving average)} \\
\text{NVT\_GC} = \frac{\text{NVT\_diff}}{\text{NVT\_diff (300 days moving standard deviation)}}
$$

## Interpretation

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. 

 This **leading indicator** predicts the appearances of local tops and bottoms, which helps traders to take their short or long positions.

### By value itself <a href="#interpretation" id="interpretation"></a>

**Predicting Local Tops and Bottoms**

* **Values over ‘2.2’** : **Short Signal**

  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**.&#x20;
* **Values under ‘-1.6’** : **Long Signal**

  If the long-term trend is way greater than the short-term trend is, the network can be interpreted as under-priced and will soon revert to mean value, meaning **long signal**.&#x20;

### By examining trend  <a href="#use-case" id="use-case"></a>

It shows **the comparative trend difference between long-term and short-term.**

* **Increasing trend** : Marketcap(Price) is **heating up** compared to transaction volume

* **Decreasing** **trend** : Marketcap(Price) is **cooling down** compared to transaction volume

![](https://3443265903-files.gitbook.io/~/files/v0/b/gitbook-legacy-files/o/assets%2F-MBHQ44vVRUAbLIaMwGN%2F-MCq02Knfkg78gNzBJFX%2F-MCvQBa12lvqtnkiFzlH%2Fimage.png?alt=media\&token=b843b5b2-06df-4cb4-929f-308c580042ef)

## Link to Our Data

* [NVT Golden Cross in CryptoQuant Live Chart](https://cryptoquant.com/overview/full/201?window=day)
* [NVT Golden Cross in CryptoQuant Data API docs](https://cryptoquant.com/docs/#operation/getNVTGoldenCross)