Financial 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:🔮
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.”
In short: MVRV is like a green/red light for buying and selling chocolates 🍫🚦.
The Formula➗
Why Z-Score?✨
MVRV alone sometimes misleads:
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:
Z-Score filters extremes
Market Sentiment:
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:
Limitations🌡️
Conclusion📍
Boost for more Skeptic takes :) 📈
Disclaimer: This article was written for educational purposes only and should not be taken as investment advice.
- 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.
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Disclaimer
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.