Bitcoin MVRV Analysis

4 Jul

Hello friends,

Thanks to the collaboration between TradingView and IntoTheBlock, you can access this data for free on TradingView with the code "BTC_MVRV."

Today, we will dive deep into MVRV, the primary data I use for trend tracking in Bitcoin.

What is MVRV?

MVRV is calculated by comparing two main metrics: market value and realized value.

Market value is determined by multiplying the current market price of a cryptocurrency by its circulating supply. On the other hand, realized value considers the total value of all coins based on their last transaction prices.

The Market Value to Realized Value Ratio (MVRV) allows us to understand the profitability of Bitcoin investors and cyclically track trends.

Bull vs. Bear

If the Bitcoin MVRV ratio is above 1, it indicates that investors are in profit, while if it is below 1 investors are at a loss.

Generally, investors pay attention to the following two levels when examining MVRV. If the MVRV is below 1 the Bitcoin price is cold as the polar north, and if the MVRV is at or above 3.7, the Bitcoin price is hot as Sahara desert.

However, to add a different perspective and to detail trend tracking, I included the 52-week simple moving average. As you can see on the chart, it has become much easier to follow bear and bull trends. We can say that if the MVRV score is above the 52-week average, the bulls are strong; if it is below, the bears are strong.

Conclusion

Currently, the MVRV is at 2.03 points, while its 52-week average is at 1.88 points.

This situation shows us that we are still in a bull trend. As a bonus, when we examine the MVRV historically, we can observe that 2.00 points is an important level. We have witnessed that the momentum in bull trends increases if the MVRV can stay above 2.00 points.

Let's see what we will witness in the current bull trend.

Thank you for reading.