MVRV Z-Score New Explanation: In the ETF Era, Don't Seek the Sword by Carving the Boat
1. What is MVRV Z-Score?
Formula: MVRV Z-Score = (Market Value - Realized Value) / Standard Deviation
Market Value (MV): A thermometer of market sentiment
Realized Value (RV): A thermometer of true cost
Z-Score: How many standard deviations it has deviated
2. Old Cycle Iron Law (Now Invalid)
Z-Score < 0: Seriously undervalued, bear market bottom (2015, 2019, 2022)
Z-Score 0-2: Fair range, dollar-cost averaging zone
Z-Score 2-5: Overvaluation warning
Z-Score > 7: Extreme bubble (October 2013, October 2017, July 2021)
3. Threefold Impact of the ETF Era
1. Institutional lock-up raises RV
2. High-frequency trading refreshes RV
3. Market size expands, making fluctuations harder
Peak structurally suppressed: 2025 bull peak only ~3.2
4. 2026 Anomaly: How did -2.28 come about?
ETF raises RV → Neutral range elevated
Price 126,000 → Below 70,000, MV shrinks
RV declines slowly (institutional lock-up)
Result: MV falls below RV, deeper negative
Key Insight: Negative value ≠ Bottom confirmation. February Z-Score -2.28, but NUPL still 0.197, continued to explore the bottom afterward.
5. New Rules
Top Alert: Z-Score > 2.5 + NUPL > 0.5
Bottom Area: Z-Score < 0 + NUPL < 0
Dollar-Cost Averaging Zone: Z-Score 0-1.5 + NUPL 0-0.3
Auxiliary Indicators: NUPL, CVDD, LTH-SOPR
6. Conclusion
Z-Score is a trend confirmation tool, not a precise timing tool. Combine multiple indicators for cross-validation.
Key Data for 2025-2026:
2025 Bull Peak ~126,000: Z-Score ~3.2, NUPL ~0.65
Extreme Bottom in February 2026: Z-Score -2.28, NUPL 0.197
Rebound in March 2026: Z-Score -1.5~-1.0, NUPL 0.15~0.20
Data Sources: Checkonchain / LookIntoBitcoin / Glassnode
🐻 Silly Bear