> For the complete documentation index, see [llms.txt](https://userguide.cryptoquant.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://userguide.cryptoquant.com/zh/network-indicators/nvm-bi-lv.md).

# NVM比率

网络价值对梅特卡夫比率（NVM比率）是指指定窗口期内市值的对数与日活地址数量平方的对数的比率。

## Definition

Network Value to Metcalfe Ratio (NVM Ratio) is defined as the ratio of the log of market capitalization divided by the log of the square of daily active addresses in the specified window.

$$
\text{NVM Ratio} = \frac{\ln (\text{Market Cap})}{\ln (\text{Daily Active Addresses}^2)}
$$

## Interpretation

NVM Ratio evaluates the fair value of the blockchain network by applying [Metcalfe's Law](https://en.wikipedia.org/wiki/Metcalfe%27s_law) where the law claims that the value of the network is proportional to the square of the number of active users. If the value is too high, the indicator indicates that the network is too **overvalued** by the interpretation where the price is too high compared to the low number of active addresses. On the other hand, if the value is too low, it means the network is too **undervalued**.

## Use Case

### RSI based market spotting

[Relative Strength Index (RSI)](https://www.investopedia.com/terms/r/rsi.asp) is one of the famous technical indicators measuring the relative strength of an upward trend and downward trend. We apply RSI to NVM for spotting the market's local tops and bottoms by thresholding. As you can see in the figure below, RSI of NVM quite correctly spots local tops and bottoms in a robust way.

![](https://2200722702-files.gitbook.io/~/files/v0/b/gitbook-legacy-files/o/assets%2F-MBHQ44vVRUAbLIaMwGN%2F-ME6bft1_4cxUlrIwQGG%2F-MELypGFxV-bRKKXrf4a%2Fimage.png?alt=media\&token=eb34d499-c08a-40b4-b592-6e5af1297cdc)

The settings for this analysis are the followings:

* We use a 7-day window for NVM for smoothing.
* We use a 14-day window for RSI formulation.
* We use 70% and 30% thresholds for the upper and lower thresholding.

## Link to Our Data

* [NVM in CryptoQuant Live Chart](https://cryptoquant.com/overview/full/470?window=day)
* [NVM in CryptoQuant Data API Docs](https://cryptoquant.com/docs#operation/getNVM)


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