Think of a fruit stand owner selling mangoes. The current price of all mangoes on the shelf represents market value — what they’d earn if sold today. But the amount they originally paid for those mangoes? That’s the realized value.
The difference between these two tells us if they’re sitting on profit — or at risk of loss if prices drop.
In crypto, the MVRV ratio works the same way.
🔍 What is the MVRV Ratio?
MVRV (Market Value to Realized Value) is a key on-chain indicator that compares the current value of all coins (market cap) to the price at which those coins were last moved (realized cap).
Formula:
iniCopyEditMVRV = Market Cap ÷ Realized Cap
- Market Cap = Current BTC price × Total supply
- Realized Cap = Sum of each coin’s price when it was last transacted on-chain
This shows how much profit or loss Bitcoin holders are theoretically sitting on.
🧠 What MVRV Tells You
- MVRV > 1: Most investors are in profit.
- MVRV < 1: Most investors are underwater.
- MVRV > 3.5–4.0: Historically signals market tops — extreme greed.
- MVRV < 1: Often aligns with market bottoms — investor fear & capitulation.
Because of this, MVRV is often used to spot macro cycle turning points.
📈 Chart Insights: Bitcoin MVRV Ratio
Charts typically show:
- 🟣 Blue Line – MVRV Ratio
- ⚫ Black Line – BTC Price (USD)
Key patterns:
- When MVRV spikes above 3.5 → risk of a correction
- When MVRV falls below 1 → potential bottoming zone
Example:
In late 2024, MVRV surged with Bitcoin’s rally.
By March 2025, a correction pushed it lower.
As of May 2025, MVRV is climbing again (~2.2), signaling recovery — but not overheated.
📌 Why Traders Use MVRV
✅ Spot Overheated Markets – High MVRV means large unrealized profits → time to consider profit-taking
✅ Identify Undervalued Zones – Low MVRV indicates many are in loss → possible buying opportunities
✅ Gauge Market Sentiment – Are people greedy or fearful? MVRV reflects collective profitability
🔸 MVRV Cheat Sheet
| MVRV Value | Interpretation | Market Signal |
|---|---|---|
| > 3.5 – 4.0 | Excessive profits | 🚨 Market top risk |
| 2.0 – 3.0 | Building profit | 📈 Bullish phase |
| 1.0 – 2.0 | Light profit | 🛒 Accumulation zone |
| < 1.0 | Losses dominate | 🔻 Possible bottom zone |
🧭 Summary
MVRV isn’t just a ratio — it’s a window into market psychology.
It helps investors and analysts:
- Detect greed vs. fear
- Anticipate bull/bear shifts
- Time long-term entries and exits
Used with other metrics like NUPL or SOPR, MVRV is a powerful macro tool for crypto traders who want to act—not react.