# MVRV

Also known as: market value to realized value.
A Breadth, Sentiment & External Data concept (Crypto-native) in the LuxAlgo Library.

## What is MVRV?

MVRV (Market Value to Realized Value) is an on-chain valuation ratio: a crypto asset's market capitalization divided by its realized capitalization. Realized cap reprices every coin at the value it held when it last moved on-chain, which makes it a rough aggregate cost basis for current holders. So MVRV above 1 means the average coin sits at an unrealized profit; below 1, at an unrealized loss. The ratio was introduced in 2018 by analysts Murad Mahmudov and David Puell, building on the realized-cap metric developed by researchers at Coin Metrics.

The lineage is compact: realized capitalization came out of Coin Metrics research in 2018 as a way to discount lost and long-dormant coins (which stay priced at their ancient last-move values), and MVRV followed within months as the natural ratio between the market's price and that aggregate cost basis. It quickly became a fixture of the [on-chain valuation suite](https://www.luxalgo.com/library/concept/on-chain-valuation-suite/) alongside SOPR and related profit-and-loss metrics.

Unrealized profit is what tempts holders to sell, which is why MVRV extremes have historically clustered near cycle turning points: stretched readings near euphoric tops, sub-1 readings during capitulation. A common refinement is the MVRV [Z-score](https://www.luxalgo.com/library/concept/z-score/), which divides the gap between market cap and realized cap by the standard deviation of market cap to make readings comparable across cycles. The evidence base is only a handful of completed cycles, so historical bands are observations, not guarantees.

The measurement has real edges to respect. Realized cap only updates when coins move, so custodial reshuffles and exchange migrations can reprice supply without any economic meaning; lost coins quietly deflate the cost basis; and cohort effects matter enough that analytics platforms publish long-term and short-term holder versions of the ratio separately. Cross-cycle drift is the other standing caveat: each cycle's MVRV extremes have printed at different levels, which is exactly why standardized forms exist.

## How to read MVRV

MVRV is a published on-chain series rather than a chart calculation; reading it is about baselines, bands, and cohorts.

1. Source the series from an on-chain analytics provider and confirm which asset and which variant (raw MVRV, Z-score, or cohort versions) you are reading.
2. Anchor on 1.0: above it the average coin carries unrealized profit, below it unrealized loss, the ratio's one assumption-free line.
3. Read extremes against the asset's own history: past tops and bottoms printed at different levels each cycle, so bands are asset-specific observations.
4. Prefer standardized forms for comparisons: the Z-score or a percentile view compensates for the drift in raw extremes as the asset matures.
5. Watch divergence at highs: price pressing a new extreme while MVRV peaks lower says the aggregate cost basis rose beneath the market, a maturing-cycle read.
6. Pair with flow evidence: valuation stretch plus rising [exchange inflows](https://www.luxalgo.com/library/concept/exchange-and-stablecoin-flows/) is a different statement than stretch with dormant supply.

## How traders use it

- As a cycle-level valuation gauge: high MVRV flags a market where the average holder carries large unrealized gains and distribution risk rises, while readings below 1 have marked late bear markets. Both extremes can persist for months.
- In standardized form: the MVRV Z-score or a percentile rank of MVRV compensates for drift in raw thresholds as the asset matures, since each cycle's extremes have not repeated at identical levels.
- Cross-checked against complementary on-chain measures such as [SOPR](https://www.luxalgo.com/library/concept/sopr/), which tracks realized rather than unrealized profit, and broader [crypto cycle models](https://www.luxalgo.com/library/concept/crypto-cycle-models/), since no single on-chain ratio times turns reliably.
- In cohort form: long-term-holder and short-term-holder MVRV separate committed supply from recent buyers, and the short-term version's proximity to 1.0 has served as a bull-market support read in analytics practice.
- As position context rather than timing: allocators use stretched readings to stage profit-taking plans and depressed readings to schedule accumulation, letting price structure and flows do the actual timing.

## MVRV vs neighboring crypto gauges

- **On-chain Valuation Suite** (https://www.luxalgo.com/library/concept/on-chain-valuation-suite/): The suite is the family: realized-cap ratios, profit-and-loss metrics, dormancy and cohort measures read together. MVRV is its most cited member, the single ratio that compresses aggregate unrealized profit into one line.
- **Crypto Cycle Models** (https://www.luxalgo.com/library/concept/crypto-cycle-models/): Cycle models frame position in time, halving rhythms and multi-year structure, while MVRV frames position in valuation, price against holders' cost basis. They are read together precisely because they can disagree, late in time but moderate in valuation or the reverse.
- **Exchange & Stablecoin Flows** (https://www.luxalgo.com/library/concept/exchange-and-stablecoin-flows/): Flows measure behavior: coins moving toward or away from venues where they can be sold. MVRV measures condition: how much unrealized profit is waiting. Stretch plus inflows is the distribution warning; either alone is a weaker statement.

## FAQ

### How is MVRV calculated?

Market capitalization divided by realized capitalization. Market cap prices the whole supply at the current price; realized cap prices each coin at the price when it last moved on-chain, approximating holders' aggregate cost basis. An MVRV of 2 therefore means the average coin carries roughly 100% unrealized profit, while a reading of 1 means the market trades at its aggregate cost basis.

### What does MVRV below 1 mean?

The market values coins below the aggregate price at which they last moved, so holders collectively sit at an unrealized loss. Historically such readings appeared in late bear markets and capitulation phases. It is not a timing signal by itself: sub-1 readings have persisted for months while price kept falling, so most analysts pair it with other evidence before acting.

### What is the MVRV Z-score?

A standardized version: the gap between market cap and realized cap divided by the standard deviation of market cap over the asset's history. The scaling makes extremes more comparable across cycles than raw MVRV, whose top readings have drifted lower as the asset matured. Historically the Z-score's extreme bands aligned with bitcoin's cycle tops and bottoms, on the usual small sample of completed cycles.

### What MVRV levels have marked tops and bottoms?

In bitcoin's recorded history, raw MVRV readings in the high-3s and above accompanied cycle tops, and readings below 1 accompanied bear-market floors, with each cycle's extremes printing at somewhat different levels (the drift that motivates the Z-score). These are descriptions of a few completed cycles, not thresholds the market owes anyone, and altcoin histories are thinner still.

### Does MVRV work for altcoins?

Where reliable realized-cap data exists, the ratio computes, and major analytics platforms publish it for large assets. The caveats scale up: shorter histories mean fewer cycles of evidence, account-based chains require different cost-basis accounting than UTXO chains, and thinner on-chain activity makes realized cap noisier. For small assets the metric often says more about data quality than valuation.

### What is the difference between MVRV and SOPR?

Unrealized versus realized profit. MVRV compares the market's price with the cost basis of coins that are sitting still, the temptation to sell. SOPR looks only at coins that actually moved, measuring whether spent outputs realized profit or loss, the behavior itself. Read together, MVRV describes the pressure stored in the system and SOPR whether holders are acting on it.

## Related concepts

- Liquidation Clusters: https://www.luxalgo.com/library/concept/liquidation-clusters/
- Open Interest: https://www.luxalgo.com/library/concept/open-interest/
- On-chain Valuation Suite: https://www.luxalgo.com/library/concept/on-chain-valuation-suite/
- Crypto Cycle Models: https://www.luxalgo.com/library/concept/crypto-cycle-models/
- Exchange & Stablecoin Flows: https://www.luxalgo.com/library/concept/exchange-and-stablecoin-flows/
- Power-law Growth Curves: https://www.luxalgo.com/library/concept/power-law-growth-curves/
- Whale-wallet Tracking: https://www.luxalgo.com/library/concept/whale-wallet-tracking/
- Funding Rate: https://www.luxalgo.com/library/concept/funding-rate/
- Futures Basis: https://www.luxalgo.com/library/concept/futures-basis/
- Long/short Account Ratio: https://www.luxalgo.com/library/concept/long-short-account-ratio/

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Source: https://www.luxalgo.com/library/concept/mvrv/ (LuxAlgo Library, the encyclopedia of trading & technical analysis). Free to use with attribution: https://www.luxalgo.com/library/license/