Ratio of market capitalization of an asset to its realized capitalization
Indicator appearance
Market value to realized value is an indicator of sentiment analysis, which shows the ratio of an asset's market capitalization to its realized capitalization.
<aside> 💡 Realized capitalization is the cost of delivery.
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Higher MVRV values indicate a greater degree of unrealized profit in the system and increase the likelihood that investors will distribute coins to lock in profits. Lower values indicate a smaller proportion of unrealized profits, which may signal both undervaluation and poor demand dynamics.
In the chart settings window, the user can select the display colors and transparency of the indicator.
Indicator Graphics Settings
The indicator is available on all subscription versions
The MRVR indicator and its derivatives are used to determine long-term trends, identify accumulation and distribution cycles. A fall of the coefficient value below 1 suggests that active speculators prevail over long-term investors.
In the understanding of the model developers, a multi-month finding of the coefficient below the value of 1 indicates an accumulation cycle.
In the original version of the MVRV indicator, a level above 3.7 is marked as a value indicating a distribution cycle. In the MVRV Free Float and MVRV Z-Score modifications, levels of distribution cycles are indicated above 3.2 and 7, respectively.
MVRV Statistics
The MVRV concept assumes that the decreasing ratio and the increasing number of coins in free float are backed by investors' long-term faith in bitcoin technology and price growth. Raising the ratio to speculative levels (3.2-7) and lowering the number of unmoved coins are seen as a way to increase the asset's visibility and expand its user base.
MVRV is one of the most popular indicators in the crypto market. It is used not only by individual researchers, but also by professional analytics companies.
Source: forklog