Onchain Data: Bitcoin MVRV Z-Score

We know that onchain data is also very important in the crypto market. Onchain data reveals details about the transactions made on the relevant blockchain, block information and other events taking place on the network.

So what is the Bitcoin MVRV Z-Score?

The MVRV Z-Score shows us whether Bitcoin is trading at a price above or below normal.

There are 3 different metrics to obtain this data.

1️⃣ Market Capitalization

2️⃣ Realized Market Value

3️⃣ Standard Deviation of Market Capitalization

If the MVRV Z-Score reaches the red area, it means that the current price is actually higher than normal and a decline is likely. If it reaches the blue area, it means that it is much lower than its normal value.

To summarize, this metric can be considered a buy signal if it's in the blue area and a sell signal if it's in the red area. In other words, if it is in the blue area, it can be interpreted as bullish, and if it is in the red area, it can be interpreted as bearish.

Currently, this metric is at 0.38. So according to this, it is close to falling to 0. This means that we are nearing the end of the bear season.

Editor's Note

These indicators don't always make sense on their own. They are often data that famous economists and traders have developed for their own strategies. Therefore, trading using this data is very risky. Make your investment decisions by analyzing this data together with current economic developments and important news in the crypto sector.