Market Value to Realized Value ratio — a Bitcoin valuation metric comparing the current market cap to the realized cap, used to identify historically overvalued and undervalued conditions.
MVRV divides Bitcoin's market cap (all coins at current price) by its realized cap (all coins at the price they last moved). When MVRV is above 1, the average coin holder is in profit; below 1, the average holder is at a loss. Historically, extreme high MVRV readings (3.5–4.0+) have coincided with market cycle tops, while readings below 1.0 have marked major cycle bottoms — the moments when the average holder is underwater and capitulation is near.
The ratio works because realized cap represents the aggregate cost basis of all Bitcoin holders. When the current price far exceeds this cost basis (high MVRV), the average holder has a large unrealized profit and increasing incentive to sell. When the ratio is low or below 1, holders are either at a loss and reluctant to sell, or the market has already gone through significant capitulation. In both cases, selling pressure tends to be lower.
MVRV is widely used by on-chain analysts and is available on platforms like Glassnode. It performs best over full market cycles and as a zone indicator rather than a precise timing tool. MVRV alone doesn't tell you when exactly the top or bottom will occur — but readings at historical extremes have reliably marked the outer edges of Bitcoin's valuation range and provided useful context for long-term position management.
This definition is for informational and educational purposes only. Nothing on Finance Compass constitutes financial, investment, or trading advice. Always conduct your own research and consult a qualified professional before making financial decisions.