Bitcoin MVRV reaches peak not seen since April 2022
Bitcoin’s market value to realized value ratio has reached its highest point since April 2022, suggesting that the cryptocurrency may have hit a long-term bottom. According to Santiment, a leading on-chain analytics firm, Bitcoin’s market value to realized value (MVRV) ratio currently stands at 61.3%. This ratio calculates Bitcoin’s market capitalization in relation to its realized capitalization, which represents the aggregate value of all coins at their last traded price. A high MVRV ratio indicates that Bitcoin’s market value is significantly higher than its realized value, potentially signaling overvaluation. Conversely, a low MVRV ratio suggests that Bitcoin is trading below its realized value, indicating undervaluation and potential buying opportunities. Furthermore, Bitcoin’s MVRV Z-Score, which uses standard deviation to identify extreme divergences between market value and realized value, currently sits at 1.53 after exiting the “buy zone” in January. Historically, Z-Score levels above 1 have corresponded with market cycle tops, while negative territory has aligned with market bottoms. The combination of the rising MVRV ratio and the Z-Score leaving oversold levels suggests that the bottom for Bitcoin may have already been established. However, it’s important to note that past performance does not guarantee future results.
