Bitcoin MVRV Ratio Has Been Stuck Under ‘1’ Since 170 Days Ago
As pointed out by an analyst in a CryptoQuant , the lowest point that the MVRV ratio has gone in this bear so far is 0.74.The “MVRV ratio” is an indicator that measures the ratio between Bitcoin’s market cap and its realized cap.
Here, the “realized cap” is a BTC capitalization model where each circulating coin’s value is taken as the price at which it was last moved/sold. All these values are then summed up for the entire supply to get the worth of BTC.
This is unlike the normal market cap, where all the coins are given the same value as the current Bitcoin price. The usefulness of the realized cap is that it acts as a sort of “real value” for the crypto as it takes into account the cost-basis of each holder in the market. Thus, a comparison between the two caps (which is what the MVRV ratio is) can tell us whether the current BTC price is undervalued or overvalued right now.The value of the metric seems to have been below one in recent days | Source:As you can see in the above graph, the Bitcoin MVRV ratio has been under a value of 1 during the last few months, which means the market cap has been below the realized cap.
BTC Price
At the time of writing, Bitcoin’s price floats around $17.2k, up 7% in the last week.
BTC has surged up | Source:
Featured image from Maxim Hopman on Unsplash.com, charts from TradingView.com, CryptoQuant.com