The MVRV indicator shows that Bitcoin currently hasn’t reached the top yet, and the crypto may still have room to grow.
Bitcoin MVRV Ratio May Show The Top Hasn’t Been Reached Yet
As pointed out by a CryptoQuant post, on-chain data suggests MVRV ratio values are still low right now, implying that the coin hasn’t yet made the top.
The Market Value to Realized Value (or MVRV in short) ratio is a Bitcoin indicator that’s defined as the market cap divided by the realized cap.
MVRV Ratio = Market Cap ÷ Realized Cap
The metric’s value tells us whether BTC’s current price is fair or not. The ratio may be too high to indicate that BTC is currently overvalued. This could indicate that there’s selling pressure.
The coin could also be seen as undervalued during low MVRV rates. These values are stable and could lead to buying pressure.
Here’s a chart showing the change in Bitcoin indicators over time:
MVRV value is still low. Source: CryptoQuant| Source: CryptoQuant
As the above graph shows, during all the previous bull runs, the indicator’s value has shown sharp spikes near the top.
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The MVRV ratio could be useful to identify tops, as high Bitcoin values may indicate that Bitcoin is too expensive. Also, buying opportunities may exist for low prices.
Looking at the chart, the indicator’s value now seems be lower than what was seen during the early 2021 rally (and also during the 2017 bull run). The chart may indicate that even though BTC has fallen in the last few days, this does not necessarily mean the bottom is in. The crypto market could have even more potential growth.
At the time of writing, Bitcoin’s price floats around $59k, up 9% in the last seven days. The coin’s value has increased by 5% over the last 30 days.
The chart below shows how Bitcoin’s prices have changed over the course of the last five business days.
BTC price dropped in recent days. Source: BTCUSD tradingview| Source: BTCUSD on TradingView
The coin is trending down since Bitcoin reached its all-time record high of $69k. Over the last several days, crypto has shown mostly sideways movements.
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There hasn’t been any sign of recovery yet, but if the MVRV ratio is anything to go by, BTC’s price may still have a while to go during this run.
Unsplash.com's featured image. Charts by TradingView.com. CryptoQuant.com chart.