A recent study probed into the demand for Bitcoin-backed investment products, with a majority of the inflows originating from the United States. Despite the recent decline, which interrupted the upward trajectory, the long-term forecast remains optimistic. According to one key indicator, the bull marketis only halfway through its cycle. Crypto analyst Axel Adler highlighted the MVRV Z scores in a post, suggesting that the current cycle is far from over.
The MVRV metric assesses whether Bitcoin is undervalued or overvalued compared to its fair value. This involves comparing market capitalization to the total capital inflow into Bitcoin. When the market value significantly exceeds the realized value, it signals a potential peak. Specifically, the MVRV Z-score measures the disparity between these values relative to the standard deviation of Bitcoin’s market value. Historically, an MVRV-Z score of 7 or higher indicates a market peak.
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