NVT Golden Cross

NVT Golden Cross (NVT_GC) is a Bollinger-band-like signaling indicator based on NVT, defined as the following equation

Definition

NVT Golden Cross (NVT_GC) is a Bollinger-band-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

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.

  • 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.

By examining trend

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

Link to Our Data

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