Bitcoin MVRV Indicator Reaches 7-Month High, Market Signal Reassessed

Amid recent consecutive market movements, technical signals for Bitcoin are attracting attention. According to monitoring data from on-chain analytics firm Glassnode, Bitcoin’s MVRV Z-Score has risen to 0.239, reaching its highest level in the past seven months. This is interpreted as an important indicator that goes beyond simple numerical changes, reflecting the current market sentiment and asset valuation levels.

What the MVRV Z-Score Means According to Glassnode Data

The MVRV Z-Score is a relative indicator that normalizes the gap between Bitcoin’s circulating market capitalization and realized market capitalization by standard deviation. Specifically, it is calculated as (Circulating Market Cap – Realized Market Cap) / Standard Deviation of Circulating Market Cap. The realized market cap is an indicator based on the last time all Bitcoins moved on the blockchain, reflecting the average price paid by investors.

What the Rise in the Indicator Suggests About the Market

A high level of this indicator suggests that Bitcoin’s current market cap is relatively overvalued compared to the actual purchase costs of investors. Conversely, a low indicator indicates undervaluation. The current value of 0.239, the highest in seven months, shows that Bitcoin’s price is reflecting the expectations of new buyers amid recent market gains.

MVRV Signals Investors Should Watch

The rising signal of the MVRV Z-Score can be used to assess which stage of the market cycle we are in. If the indicator remains high consistently, it may suggest the market is overheating, which could mean that existing holders are nearing profit-taking. Conversely, if the indicator starts to decline again, it signals a shift in market sentiment.