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Mvrvratio

MVRV Demystified: A Guide to Tops, Bottoms & RiskFinancial nerds love to give tools weird names to make them look like fortune-tellers. Some actually are predictive—like grandma’s dreams!🌙 I’m Skeptic from Skeptic Lab , and today we’re talking about MVRV .. First off, it can’t predict the future , but it tells you four key things:🔮 Identifying market tops and bottoms Assessing market sentiment Trading strategies Risk management What is MVRV? 🔍 Imagine you have a box of chocolates. You want to know how many you have and what they’d be worth if everyone decided to buy or sell. MVRV is a number that shows: “How the current value of everyone’s chocolates compares to the price they originally paid.” High MVRV → people are selling chocolates for much more than they paid → expensive market. Low MVRV → people are selling for less than they paid → cheap market, potential buy zone. In short: MVRV is like a green/red light for buying and selling chocolates 🍫🚦. The Formula ➗ Market Value (MV): total value of all coins at current market price. Realized Value (RV): total value based on last on-chain transaction price — a "truer" cost basis, filtering out short-term volatility. Why Z-Score? ✨ MVRV alone sometimes misleads: In bull markets , it can stay high for weeks → fake sell signals. Low MVRV can just be short-term noise. One week after MVRV was introduced, David Puell and Murad Mahmudov created the MVRV Z-Score. It standardizes MVRV against historical mean and volatility, showing if current levels are truly abnormal. Z > 7 → speculative top Z < 0 → deep undervaluation, potential bottom Applications 🎯 Spotting Tops & Bottoms: High MVRV (>3.5) = late bull top Low MVRV (<1) = bear bottom, strong buy Z-Score filters extremes Market Sentiment: High = greed, low = fear → emotional barometer Trading Moves: Long-term: buy <1, hold Medium-term: sell >3.7, buy <1 Timebound MVRV (365d, 60d) shows short vs long-term holder pressure Risk Management: Identifying potential profit zones Checks if BTC is overpriced/undervalued vs RV Works best combined with SOPR, NVT, macro factors Limitations 🌡️ Sensitive to volatility Assumes on-chain movements = sales (not always) Blind to shocks (regulations, macro events) Overvaluation can persist → mistimed sell signals Needs historical data → weak for new coins Not standalone → combine with other metrics Conclusion 📍 MVRV compares Market Value to Realized Value → shows over- or undervaluation Identifies market tops and bottoms Z-Score filters noise, highlights abnormal levels Historically effective in Bitcoin cycles Best used with other metrics for holistic analysis Boost for more Skeptic takes :) 📈 Disclaimer: This article was written for educational purposes only and should not be taken as investment advice.
Education
by SkepticLab
Bitcoin matve recoverj g on PA but there maybe trouble aheadI thought I would Update the Fib Extensions to the Bitcoin Index MVRV Z score. Hate to admit, I had forgotten to look at these recently. And, Simply put, we Are approaching a line of Decision time. That red line below the 236, is a point, that once crossed, is not that easy to rise above again till after hitting the bottom. Vertical lines are ATH dates so, it is easy to see, MVRV has got no where near the usual ATH levels and so give hope for a further push higher, should we recover from dipping below the 236. But as many of you know, that 236 is a Line of tough battles...itis not easy to recover above We need to watch this very closely. I am optimistic for a bounce now but we need to pay attention to the bigger picture. Monthly MACD is turning over, yet to cross bearish but the weekly is recovering nicely.
CRYPTO:BTCUSD
by Orriginal
BITCOIN 2013-2017 MVRV has a surprise for current PAThe Chart above is BTC PA and the Parabolic rises to ATH but in this post, we are concentrating on a few surprising possibilities with the MVRV Z Score shown in the chart below. The Z-Score,(Green in the Chart) divides the difference between Market cap and realized market cap by the historic standard deviation of the market cap. Historically, this has been insanely accurate at detecting bitcoin tops and bottoms: A Z-Score above 7 means bitcoin is vastly overpriced and at a local top. A Z-Score below 0.1 means bitcoin is underpriced and at a local bottom. The Green "puddles" at the bottom of the Image are effectively under priced or OverSold -demand is Low and so coins lost value The orange line at top of image is Over Priced Or Overbought. - Demand was high and so price rises until it become over priced and profit taking begins. Notice that when BTC PA is gathering momentum, how the Z Scores rises over the MVRV Every time. The upper Day counts are from when the Z Score left under priced and go to when they topped out above over priced, when BTC reached ATH ( orange dotted lines) and show a variation of around 200 days ay first glance. And Now, what do we have ? For me, the most interesting This is that double peak of the MVRV Z Score in 2013, 259 days apart from each other. The 2 ATH's we had in 2021 were also EXACTLY 259 days apart from each other. We have a similar "Curve" in the MVRV lines as we had between 2013 and 2017. I have added all 3 day counts together and divided by 3 to get the average count and drew a Box to give us an area of possible ATH. BUT if we are following that "pattern " from 2013 to 2017, it will be 777 days to the ATH, Which puts us around March 2025. And THAT has a huge amount of confluence with other charts. Keep your eye on the Z Score to see when we are Fully heading to ATH. And if anyone has any ideas about that day count between the 2 peaks of Z Score and the 2 ATH, please do let me know.....I am very intriged by this and consider it a little more that coincidence. Just not to sure why yet.
BITSTAMP:BTCUSD
by Orriginal