Summary
MVRV is the ration of Market Value (today’s value) to Realised Value (acquisition Value). It answers the question: “Is the current market as a whole in profit or loss, and by how much?
SOPR and MVRV are similar, but whereas SOPR measures the profit realised daily, MVRV measures how much profit is stored up in the system and not yet realised.
Both give insights into market sentiment but with different flavours.
Uses of the chart
MVRV gives a measure of how much profit is held in the Bitcoins owned. If it’s a larger amount – then the owners will be more likely to sell. As the measure reaches extremes, the likelihood of selling increases – until finally the price is attractive to the most people, who sell, and the price cascades down.
Variations of the chart
We can apply a “Z-score” to MVRV. This is a statistical measure of the likelihood of the indicator reaching an extreme. The Z-score of MVRV applies coloured bands to the highs and lows, so we can see that when MVRV-Z reaches the red zone, it is very likely to be approaching a peak. This helps give a clue, or confirm our impression, that Bitcoin is going to “top” soon or very soon.
It’s clear that we need to pay attention once MVRV-Z enters the red zone.
Will it predict highs and lows?
Yep, this indicator will undoubtedly help us identify the highs and lows in Bitcoin’s price.
Paid and free sources
MVRV Glassnode: https://studio.glassnode.com/metrics?a=BTC&m=market.Mvrv
MVRV Z-Score Glassnode: https://studio.glassnode.com/metrics?a=BTC&m=market.MvrvZScore
MVRV Z-Score (Free): https://www.lookintobitcoin.com/charts/mvrv-zscore/
Short-Term and Long-Term Holder MVRV
These offer further refinements of the MVRV data – telling us how much the “newbies”, and the “hodlers” are in profit, on average:
STH MVRV Glassnode: https://studio.glassnode.com/metrics?a=BTC&m=market.MvrvLess155
LTH MVRV Glassnode: https://studio.glassnode.com/metrics?a=BTC&m=market.MvrvMore155