MVRV

MVRV is an on-chain indicator equal to a coin's market cap divided by its realized cap. It shows how far holders are in profit or loss on average.

How it works

Market cap is the current price times all coins. Realized cap values each coin at the price when it last moved on-chain, roughly the average purchase price of all holders. MVRV is the ratio of the two.

MVRV above 1 means the average holder is in profit, below 1 means at a loss. Historically for bitcoin, readings above 3–3.5 lined up with overheated markets near tops, and readings below 1 with zones near bear market bottoms. Variants such as the MVRV Z-Score adjust for spread.

The indicator works over long horizons and for coins with a long history. Thresholds shift from cycle to cycle, and lost coins and exchange transfers distort the numbers. It is a tool for judging the market phase, not for precise entries.

Example with numbers

BTC market cap is $1.2 trillion and realized cap is $600 billion. MVRV = 1,200 / 600 = 2. The market price is about twice the average price at which coins last moved: holders are in solid profit on average, but still some way from historically overheated levels.

Common mistake

A common mistake is selling everything as soon as MVRV hits a "historic" level, or waiting for an exact repeat of past peaks. Recent cycle tops came in lower than earlier ones. Use MVRV as one input for scaling out or in gradually, not as a one-click signal.

Questions and answers

What is MVRV in simple terms?

It compares what all coins are worth now with what holders paid on average. It shows how deep in profit holders are.

What MVRV value is considered high?

For bitcoin, above 3–3.5 has historically been an overheated zone and below 1 a zone of deep pessimism. The thresholds change from cycle to cycle.

Can you trade using MVRV?

It is too slow for short-term trading. It is used to judge the overall market phase months ahead.

MVRV

How it works

Questions and answers

Related terms

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