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Description

The MVRV Z-Score measures the deviation between an asset’s market value and its realized value. It is commonly used to identify periods when the market may be overheated (overvalued) or undervalued relative to historical norms. Elevated Z-Scores often coincide with market tops, while suppressed scores may indicate potential market bottoms. This metric is available for both Bitcoin (BTC) and Ethereum (ETH).

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Use Cases

The MVRV Z-Score is a valuable tool for evaluating market cycles and assessing whether an asset is trading above or below its aggregated cost basis. It can assist in identifying overbought or oversold conditions, drawing comparisons between historical valuation extremes, and informing strategic decisions such as accumulating during undervalued phases or reducing exposure near potential peaks.

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Methodology

MVRV Z-Score = (Market Cap - Realized Cap) / Std(Market Cap) The standard deviation is computed cumulatively from the inception of the dataset to the present day, providing a dynamic normalization of the deviation between market and realized capitalization values.