Bitcoin 30 Day MVRV

Neither this post nor any other on cryptofal.com should be taken as financial advice. It is not.

The MVRV ratio (market-value-to-realized-value) is a ratio of an asset's Market Capitalization versus its Realized Capitalization. This helps to give us a sense of what the fair market value of the token currently is. Using the 30-day average compared to the current price it is showing that it is currently undervalued or oversold. This is a good indicator to use as one of your signals to buy or sell based on the current standing of the market.

Over the last couple of days, the market has been dumping due to news of high inflation numbers as well as continued interest rate hikes by The Federal Reserve. There is no exact science to tell when the market has hit a bottom or a top but this is one metric that can help you get a better sense of that. The general idea is that when the MVRV has turned negative it could be a good time to accumulate rather than sell when it is in the red. This is what we are seeing from this chart but that does not mean we can’t go lower from here either.

The same works the other way around, when it is a high positive percentage it may be overbought and a good time to get out of a position as a top may be near. It is always important to have other indicators that you can use to back up a theory that you have. That is because again, there is no exact science from any of these metrics. They are just there to give you a better idea of what is going on in the market so you can make an informed decision.