Bitcoin MVRV Z-Score Indicates Bitcoin is Not Overvalued Yet
According to a post on X by Reflexivity Research co-founder, the BTC MVRV Z-Score readings have not reached high levels compared to previous bull runs. The Market Value to Realized Value (MVRV) ratio is an indicator that measures the ratio between the Bitcoin market cap and the realized cap. The realized cap represents the total capital invested in the asset by holders. By comparing the market cap against this model, the MVRV ratio can indicate whether investors are holding more value than they put in. If investors are in net profits, they may be tempted to sell, leading to a correction. Conversely, if the market is in losses, it suggests undervaluation and a potential rebound.
Trend in Bitcoin MVRV Z-Score
A chart shows that while Bitcoin has rallied, it has not reached levels similar to past tops. This suggests that Bitcoin is far from overvalued based on historical readings.
BTC Price
Currently, Bitcoin is trading at around $43,800, experiencing a 15% increase in the last week.
Hot Take: Bitcoin’s Value Not Yet Overinflated
The data from the historical on-chain indicator known as the Bitcoin MVRV Z-Score suggests that Bitcoin has not become overvalued following its recent uptrend. Comparing current readings to past bull runs shows that there is still room for growth before reaching levels of overvaluation. This indicates that investors are not holding significantly more value than what they initially invested, reducing the likelihood of a major sell-off. However, as with any investment, corrections may occur along the way. It’s important to consider both short-term fluctuations and long-term trends when evaluating the value of Bitcoin.
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