What is the MVRV Z-Score that surged to 0.239 after 7 months, attracting market attention?

Glassnode’s latest monitoring results are attracting market attention. The Bitcoin MVRV Z-Score has risen to 0.239, reaching its highest level in the past seven months, according to ChainCatcher. What does this figure imply, and how should investors interpret it?

Bitcoin Status Signal from Glassnode Data

Glassnode, a leader in blockchain data analysis, monitors various indicators of the Bitcoin network in real time. The recent increase in the MVRV Z-Score is considered an important signal reflecting the rapid changes in the current Bitcoin market. Reaching the highest level in seven months suggests that market sentiment is significantly elevated.

Reading Bitcoin’s True Value with the MVRV Indicator

The MVRV Z-Score is a relative valuation metric defined as:

MVRV-Z Score = (Circulating Market Cap - Realized Market Cap) / Standard Deviation

Here, “Realized Market Cap” is calculated based on the value of all Bitcoin transactions recorded on the blockchain, reflecting the price at which each coin was last moved. It approximates the actual cost basis for investors—what they have paid on average.

In contrast, the circulating market cap is based on the current market price. A high MVRV indicates that the current price is significantly above the average purchase price, suggesting Bitcoin may be overvalued. Conversely, a low MVRV suggests the current price is below the average cost basis, indicating undervaluation.

0.239 Level—How High Can It Go?

The current level of 0.239 is not to be ignored. Historically, whenever the MVRV Z-Score reaches this level, the market has experienced notable turning points. Some analysts interpret this as a bullish signal, while more conservative investors see it as a warning of overheating.

An increasing MVRV indicates that Bitcoin’s profitability is expanding, and most market participants may already have realized significant gains. There are concerns that profit-taking pressure could intensify at this point.

Useful Ways for Investors to Use the MVRV Indicator

The MVRV Z-Score is more than a simple technical indicator; it is a valuable tool for assessing market sentiment and price legitimacy. When using this indicator, it’s important to consider not just the absolute value but also trend changes and historical context. The future direction of the current 0.239 level will depend on additional market variables and macroeconomic conditions.