MVRV Z-Score

MVRV Z-Score

What it is

The MVRV Z-Score measures how far the network's market value deviates from the estimated cost basis of its holders, expressed in units of historical market-cap volatility.

How it is calculated

MVRV Z-Score = (Market Cap - Realized Cap) / StdDev(Market Cap)

Market Cap (market capitalization) — the current price of one coin multiplied by the number of coins in circulation.

Realized Cap (realized capitalization) — each coin is valued at the price when it last moved on the blockchain, and these values are summed. This approximates the aggregate cost basis of all coins in the network.

StdDev(Market Cap) — the standard deviation of market capitalization over the full available history, measuring how much it has typically fluctuated.

Dividing the gap between Market Cap and Realized Cap by historical volatility normalizes the metric, allowing different market cycles to be compared on the same scale.

How to read it

High positive values — the market value is far above holders' estimated cost basis relative to historical variation. Historically, such values have coincided with overheated market conditions and cycle tops.

Around zero or negative — the market value is close to or below the estimated cost basis. Historically, such periods have been associated with undervaluation and accumulation.

What it is used for

Identifying statistically extreme market conditions and comparing the peaks and troughs of different market cycles on a single scale.

Limitations

The standard deviation is calculated over the entire historical market-cap series. As the network grows over time, the historical distribution changes, which can affect the scale of the metric. Thresholds from past cycles should therefore be revisited over time.