Recent data shows that the Bitcoin ($BTC) Market Value to Realized Value (MVRV) ratio peaked at 4.35 during the 2017 bull market and 3.7 in 2021, according to IntoTheBlock. Currently, the MVRV ratio has peaked at 2.64 level. It is a relatively low level compared to past cycles. This has sparked discussions about where the market is headed.
Historical MVRV Insights:2017 Peak: 4.352021 Peak: 3.7During the current cycle, MVRV peaked at 2.64, which seems relatively low to signal a market top. What MVRV level are you keeping an eye on? pic.twitter.com/Vq2iViWEtp
— IntoTheBlock (@intotheblock) October 3, 2024
Bitcoin MVRV Ratio Offers Crucial Insights Into Market Trends
MVRV refers to a market capitalization to market realization value that brings out the worth of Bitcoin’s market. The market value of is the price of Bitcoin in the marketplace at the time of putting an economic value on the currency.
On the other hand, the realized value gives the price at which any of the Bitcoins was last sold. The ration can be used to identify whether Bitcoin is overvalued or undervalued. It provides information about possible market highs and lows.
Current MVRV Ratio Signals Bitcoin Is Below Market Top
In the past, MVRV had high readings at market peaks – the all-time high of 4.35 in September 2017 being a perfect example. Likewise, the market corrected in 2021 when it reached a peak of 3.7. However, the current MVRV ratio stands at 2.64, which is still a long way off the market top.
Lastly, the current ratio of MVRV at 2.64, indicated by IntoTheBlock, shows that Bitcoin is still below the market top as compared to other periods. Although it does not indicate overvaluation yet, monitoring the MVRV ratio is crucial for identifying market shifts. This helps in making well-informed investment decision.
