Bitcoin: Market Value to Realized Value Z-Score

hey everyone and thanks for jumping back into the cryptoverse today we're going to talk about Bitcoin and we're going to be discussing the market value to realized value zcore or mvrv zcore if you guys like the content make sure you subscribe to the channel give the video a thumbs up and also check out the sale on into the cryptoverse premium at intothe cryptoverse decom let's go ahead and jump in so the mvrv zcore is something that has his ially been useful for helping us to better identify you know true euphoric Mania phases it can also be used to identify Market cycle bottoms so we essentially have three different lines on the chart right the first thing we have the blue line which is the market cap of Bitcoin the orange line that's just below the blue line that is the realized C okay that's the realized cap if you look at the this line right here this is the MV rvz score now the mvrv Z score is just simply equal to the market cap of Bitcoin minus the realiz cap divided by the standard deviation of the market cap so the the the cool thing about this metric is that essentially whenever the market cap of Bitcoin goes below the realiz cap that tends to Mark Market cycle bottoms right you can see in 2011 and in 2015 and in 2018 and then again in 2022 so whenever you see that go below zero that's historically been a a low or pretty close to it right pretty close to I mean you can see this past cycle it went below it um and then it went below it once more about you know almost half a year later or so it can also be used to help us identify sort of true euphoric Mania phases now if you go back and look at last cycle there was sort of a a midcycle top in June of 2019 and if you looked at the mvrv Z score you could see that at that top the mvz score only went up to about 2. 67 however historically Market cycle tops for bit coin corresponded to mvrb Z scores that were basically between s and 11 or so this might have gone slightly yeah this is around 11 so between seven and 11 so back in 2019 to help us identify that this was a midcycle top and not a market cycle top we were able to look at the mvrv zcore but then in 2021 you can see that the MVR VZ score went all the way up to seven right seven and that was sort of a a warning signal that the market was getting pretty heated this is actually further Evidence you know a lot of people talk about this that in 2021 sort of the real top was early on and then we sort of had you know like um a dead cat bounce that somehow made its way to a new all-time high so perhaps it's not best called a dead cat bounce but and ultimately I think price action is king So you sort of respect price over the indicator but you can understand why a lot of people were more convinced of the first top than the second top now we also had a top in March by the NBR bz score that also hit three now remember the one in 2019 hit around 2. 67 now back in March we suggested that this was likely not a market cycle top but a mid cycle top essentially you know sort of an early top that occurs where the Euphoria kind of front runs everything and then we have to spend a while going down before we then pick back up again so you could look at a chart like this and and simply say all right well it made sense that this was not the market cycle top because the MV RBZ score only went to three and historically Market cycle tops for Bitcoin have corresponded to when the mbz score hit somewhere between like 7 to 10 right around 7 to 10 in fact the first cycle top the MV rvz score topped out at around 7.

68 the last one topped out at around 7. 15 so and you can see sort of the ones in between went even higher again right now the mvrv Square High For This cycle is 3.