Formula & Calculator
MVRV Ratio (Simplified)
Compares a cryptocurrency's current market value to the aggregate value at which all coins last moved, indicating whether holders are in aggregate profit or loss.
Interpretation
MVRV = Market Cap / Realized Cap. Compares current market cap to the average acquisition price. Used to assess market sentiment.
Variables
| Symbol | Quantity | Unit |
|---|---|---|
| MVRV | Market value to realized value ratio | |
| Market Cap | Current total market capitalization | currency |
| Realized Cap | Sum of each coin's value at its last on-chain movement | currency |
What it means
MVRV (Market Value to Realised Value) is a metric used to assess whether a crypto asset is overvalued or undervalued. Realised cap is the sum of each coin’s value at the price it last moved. A high MVRV indicates high profit potential, often a market top. This is used by on‑chain analysts to gauge market sentiment and to identify buying/selling opportunities.
Worked example
MVRV Ratio – Two Detailed Examples
Real‑World| Parameter | Value |
|---|---|
| Market Cap | $1,200,000,000,000 |
| Realized Cap | $600,000,000,000 |
| Parameter | Value |
|---|---|
| Cap | $800,000,000,000 |
| Realized Cap | $900,000,000,000 |
Common mistakes
- MVRV ratio: Market Cap to Realised Cap – measures market sentiment.
- Market cap: Current market cap.
- Realised cap: The sum of the value of all coins at the price they last moved.
- MVRV >1: Market is in profit on average; <1 indicates losses.
Applications
MVRV Ratio (simplified) compares market cap to realised cap, indicating whether the market is overvalued or undervalued based on the average acquisition price of coins. A high MVRV suggests overvaluation. Investors use it to time market cycles. Understanding MVRV helps in identifying potential tops and bottoms.
- Assessing market valuation relative to cost basis
- Identifying potential market tops and bottoms
- Timing investment decisions based on on‑chain data
- Fundamental analysis of holder profitability
- Educational understanding of realised cap
Frequently Asked Questions
MVRV = Market Cap / Realized Cap. A value above 1 means holders are in aggregate profit; below 1 means they are in loss. For example, if Market Cap is $1.2T and Realized Cap is $600B, MVRV = 2.0, indicating significant profit.
Realized cap values each coin at the price it last moved on-chain, whereas market cap values all coins at the current price. Realized cap gives a cost-basis view of the network.
It indicates that holders have large unrealized profits, which often leads to selling pressure. Historically, high MVRV has preceded market tops.
It indicates that many holders are in loss. This can signal a market bottom, as sellers may be exhausted, and long-term holders accumulate.
It is a popular on-chain indicator to identify market cycle extremes. Many analysts use it alongside other metrics to time entries and exits.
The concept applies to any UTXO-based or account-based chain that tracks last movement prices. However, the interpretation may differ by network.
It changes with price movements and on-chain transaction activity. Realized cap updates only when coins move, so MVRV can be slower to change than market cap alone.
It is more suited for macro timing rather than short-term trading. For daily trades, other indicators like RSI or volume are more appropriate.