MVRV Ratio
Market Value vs Realized Value — shows whether BTC is overvalued or undervalued.
MVRV (Market Value to Realized Value) is a key on-chain metric comparing Bitcoin's market capitalization to its realized capitalization.
What is Realized Cap:
•Sum of all BTC valued at the price of their last transaction
•Better proxy for "true" value versus market price
•Less volatile than Market Cap
Formula:
•MVRV = Market Cap / Realized Cap
Interpretation:
•MVRV > 3.5 → historically peak zone (saturation, time to sell)
•MVRV 1–2 → fair value zone
•MVRV < 1 → undervaluation, historical bottoms
History:
•December 2017 MVRV ~8 → bull peak
•March 2020 MVRV ~0.85 → Covid bottom
•November 2021 MVRV ~3.5 → cycle peak
•June 2022 MVRV ~0.7 → capitulation (FTX)
MVRV Z-Score:
•Normalized version showing standard deviations from norm
•Z-Score > 7 → extreme overvaluation (red zone)
•Z-Score < 0 → extreme undervaluation (green zone)
Where: Glassnode, LookIntoBitcoin