MVRV metrics gives some clues at what stage of the bull market we are now
Hello my fellow bloggers! Do you want to know if we are at the top of the market or the bull run is just warming up? Today we are going to discuss a metrics that gives some clues. Let’s dive in and investigate!
One of the most interesting metrics that shows our progress in bull cycle is MVRV - Market Value To Realized Value. Don’t know what this metrics is about? Let me explain it. Metrics consists of two terms. I am sure you already know the first one - 'Market Value'. You may know it under a more common name - the market cap. The second term is the 'RV' which stands for 'Realized Value'. This term is almost as simple as market cap. Realized value is the cost of Bitcoin at the time its last transfer. For example, if BTC was bought in early 2020 for $6000 then its realized value is exactly $6000. At the same its current market value is $57 860 (according to current BTC price).
MVRV is Market Valuedivided by Realized value. As you already guessed, if MVRV is greater than 1, investors are in profit. If the MVRV is between 0 and 1, then the market is “undervalued” on average, meaning most people will be realizing losses if they all sell their holdings. Ok, now we are ready to check some historical data:
You can see previous tops highlighted in yellow. For all previous bull cycles, MVRV value for long-term holders was above 20. At this moment, MVRV is just 10. If we assume this bull cycle will run similar to previous one, we are not close to the top yet. At this very stage in 2017 BTC cost was around $4500. The top of the market was 4 times higher. I don’t think BTC price can go 4x from the current position. I believe in BTC and I’m sure it will go above $100k, yet going above $200k just seems too much for this bullrun. Yet we still need to have MVRV at least above 14-15 to claim we are near the top.
What do you think about current market stage? Is this the end or just the beginning? Let me know in the comments below! If you found this info helpful or entertaining, please, consider upvoting this post.
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Disclaimer
I’m not a financial of any kind. I encourage you to check all information yourself and make decision only based on your own opinion. All articles are created for solely entertainment purpose.
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