What is MVRV, and how do traders read it?
MVRV, market value to realized value, divides a coin's market cap by its realized cap, which values each coin at the price when it last moved. A reading of 1.25 means holders are up 25% on average, and below 1 means they are at a loss. Traders use MVRV and its holder-age versions to judge how stretched valuations are.
Say an illustrative coin has 20,000,000 units in circulation and trades at $50,000. Its market cap is $1,000 billion. If its coins last moved on-chain at an average price of $40,000, its realized cap is $800 billion.
$1,000 billion ÷ $800 billion = 1.25. That is the coin's MVRV, and it says holders as a group are sitting on a 25% paper gain.
What MVRV measures
MVRV stands for market value to realized value. Market value is market cap: every coin at today's price. Realized value is realized cap: every coin at the price when it last moved on the blockchain.
The formula is MVRV = market cap ÷ realized cap. Both caps use the same supply, so it also equals price ÷ realized price. In the example, $50,000 ÷ $40,000 = 1.25.
Realized price is the average on-chain cost of all coins, covered in the cost basis lesson. MVRV tells you how far price has moved away from that average.
Worked example: four prices
Keep the realized cap at $800 billion, a realized price of $40,000, and change only the price. These numbers are illustrative.
| Price | Market cap | MVRV | Average holder |
|---|---|---|---|
| $30,000 | $600 billion | 0.75 | 25% loss |
| $40,000 | $800 billion | 1.00 | Breakeven |
| $50,000 | $1,000 billion | 1.25 | 25% gain |
| $100,000 | $2,000 billion | 2.50 | 150% gain |
Each market cap is 20,000,000 × the price. At $100,000, that is $2,000 billion, and $2,000 billion ÷ $800 billion = 2.50.
In a real market the realized cap moves too. When coins move, they are repriced at today's price, and that pulls MVRV toward 1.
Say price stays at $50,000 and 2,000,000 coins that last moved at $30,000 are sold to new buyers. Realized cap rises by 2,000,000 × ($50,000 minus $30,000) = $40 billion, to $840 billion.
MVRV falls to $1,000 billion ÷ $840 billion = 1.19, even though price did not move. Heavy profit-taking lowers MVRV this way, because sellers hand coins to buyers at today's price.
How traders read MVRV
Below 1, the market trades under its average cost basis, so holders as a group are at a loss. Selling at that point locks in a loss for the average holder, which many are slow to do.
Above 1, holders are in profit on average. The higher MVRV climbs, the more paper gain is sitting there ready to be taken.
On Bitcoin, MVRV has been high near past cycle peaks and near or below 1 near past cycle lows. Traders use that history to judge how stretched the market is, and MVRV does not time entries or exits on its own.
The peaks have not all reached the same level, though, and MVRV can stay high for months while price keeps climbing. No fixed number marks a top, and none marks a bottom.
Short-term and long-term holder MVRV
Providers split MVRV by coin age using each group's realized price. Short-term holder MVRV is price ÷ the realized price of coins that moved recently, often within about 155 days. Long-term holder MVRV uses the older coins.
Say price is $50,000, the short-term holder realized price is $60,000, and the long-term holder realized price is $30,000.
Short-term holder MVRV is $50,000 ÷ $60,000 = 0.83, so recent buyers are about 17% down on average. Long-term holder MVRV is $50,000 ÷ $30,000 = 1.67, about a 67% gain.
Short-term holder MVRV swings around 1 much more often. When it drops under 1, recent buyers are under water, and some may sell into rallies to get back to breakeven.
Long-term holder MVRV moves slowly and shows how much profit patient holders have built up.
Where MVRV misleads
MVRV depends on realized cap, so it carries every weakness of on-chain cost basis. Coins lost in the early years sit at prices close to zero and make holders look richer.
Moves between a holder's own wallets reset cost without a trade, and trades inside exchanges are invisible.
Providers label wallets and clean the data differently, so their MVRV readings differ. The gap is larger for account-based chains such as Ethereum, where cost basis has to be estimated.
The market has changed over time too. Spot Bitcoin ETFs and other custodians hold large amounts of bitcoin, and the investors behind them may behave differently from holders in earlier cycles.
Read MVRV next to market cycles, price and your own plan. Whatever MVRV says, size each position so that being wrong costs you an amount you accepted in advance.
Questions
What does an MVRV of 1 mean?
Market cap equals realized cap, so the price matches the average on-chain cost basis. Holders as a group are at breakeven on paper.
Is a high MVRV a sell signal?
High MVRV means holders are sitting on large paper gains, as they were near past peaks. It has also stayed high for long periods, so it is no sell signal on its own.
What is the difference between MVRV and the MVRV Z-score?
MVRV is a plain ratio of market cap to realized cap. The MVRV Z-score measures the gap between them in units of market cap's historical standard deviation.
Why do traders watch short-term holder MVRV?
Recent buyers are the most likely to react to price. Their MVRV shows whether they are in profit or at a loss, which hints at where they might sell.
Keep learning
Chapter 2What is on-chain analysis?On-chain analysis is the study of a blockchain's public records, such as transfers, balances and the age of coins, to see how holders behave. Data providers turn raw transactions into metrics like exchange flows and realized price. It adds context about supply and holder profit, but it cannot tell you when to trade.
Chapter 2Spot volume and volume delta.Spot volume is the amount of a coin traded for immediate delivery over a period. Volume delta splits that volume by who started each trade: volume from market buy orders minus volume from market sell orders. A positive delta means buyers were the more aggressive side, which is different from saying there were more buyers.
Chapter 2Exchange flows and exchange balances.Exchange flows track coins moving onto and off known exchange addresses. Inflows arrive, outflows leave, and netflow is inflow minus outflow. Exchange balance is the total held at those addresses, often shown as a share of supply. Rising balances can mean coins ready to sell, but every figure depends on how well a provider labels exchange wallets.
Chapter 2What is on-chain cost basis?On-chain cost basis estimates what holders paid by valuing each coin at the price on the day it last moved on the blockchain. Add those values up and divide by the supply, and you get the realized price, the average cost of the whole market. Split by coin age, it gives a separate cost for short-term and long-term holders.
Chapter 2What is SOPR?SOPR, the spent output profit ratio, compares what coins were worth when spent on-chain with what they were worth when last received. Above 1 means the coins that moved were spent at a profit on average; below 1 means at a loss. Traders watch how SOPR behaves around 1 to see whether holders are taking profits or giving up.
Chapter 2What is NUPL?NUPL, net unrealized profit and loss, measures how much paper profit or loss all holders of a coin are sitting on, as a share of market cap. It equals market cap minus realized cap, divided by market cap. A positive reading means holders are in profit overall; a negative one means the market trades below its on-chain cost basis.
Chapter 2What is the MVRV Z-score?The MVRV Z-score measures how far a coin's market cap sits above or below its realized cap, in units of the standard deviation of market cap over its history. The formula is market cap minus realized cap, divided by that standard deviation. High readings mean an unusually stretched market; readings below 0 mean price is under the average on-chain cost.
