What is the MVRV ratio?
The MVRV ratio (Market Value to Realized Value) is an on-chain indicator that compares Bitcoin's current market capitalisation — what the market values it at — to its realised value — what holders actually paid for their bitcoins. It measures, on average, the level of unrealised profit or loss across all market participants.
An MVRV ratio of 2 means holders are sitting on an average profit of 100% relative to their purchase price. A ratio below 1 means the market as a whole is in unrealised loss.
How is MVRV calculated?
MVRV = Market Cap / Realized Cap
The Market Cap is the current price multiplied by the total number of bitcoins in circulation — it is the instantaneous market valuation.
The Realized Cap is the sum of each bitcoin valued at the price at which it was last moved on the blockchain. Unlike the Market Cap, it does not fluctuate with the market price — it reflects the aggregate acquisition cost of all bitcoins.
Reading the ratio in practice
MVRV > 3.5: historical overbought zone. Holders are sitting on high average profits, selling pressure increases. The last three major cycles peaked with an MVRV between 3.5 and 7.
MVRV between 1 and 3.5: neutral to bullish zone. The market is in moderate profit, dynamics are healthy.
MVRV between 0.8 and 1: accumulation zone. The market is close to equilibrium between market value and acquisition cost — historically a favourable long-term entry zone.
MVRV < 0.8: capitulation zone. The market is in widespread unrealised loss. These levels corresponded to the lows of the 2015, 2018 and 2022 cycles.
Historical MVRV signals
2017 cycle: MVRV reached 6.5 at the December 2017 peak, signalling extreme euphoria. It fell back below 1 in December 2018 during the capitulation.
2020-2021 cycle: peak at 7 in January 2021 at the first $42,000 top. Second peak at 3.8 in November 2021 at the $69,000 top — a significant bearish divergence between the two peaks of the same cycle.
2024-2025 cycle: MVRV traded in a range of 1.8 to 3.2, confirming a more mature cycle with a broader, less speculative investor base.
Limitations of MVRV
MVRV is a cyclical positioning indicator, not a precise timing tool. It can remain in overbought territory for months before a reversal. It does not capture permanently lost bitcoins — whose private keys are inaccessible — which can slightly overstate the Realized Cap. Variants such as the MVRV Z-Score partially address this limitation by normalising against historical standard deviation.
MVRV and macro analysis
MVRV is most relevant alongside a macro reading. A high MVRV in a context of monetary tightening (rate hikes, Fed balance sheet reduction) amplifies the caution signal. Conversely, a low MVRV in a monetary easing context has historically constituted one of the most favourable entry points documented on Bitcoin.