The MVRV metric offers a refined lens for identifying Bitcoin market tops and bottoms by comparing market value to realized value — providing insight into whether BTC is overvalued or undervalued relative to its historical cost basis.

\[ \text{MVRV} = \frac{ \text{Market Value} }{ \text{Realized Value} } \]

Market Value: The current Bitcoin price multiplied by the total circulating supply — representing what the market believes Bitcoin is worth today.

Realized Value: Instead of using current prices, Realized Value reflects the aggregated price at which all Bitcoins last moved, offering a more grounded view of the network's cost basis.

Using the Indicator for Bitcoin Price Prediction:

Identifying Extremes: Historically, very high MVRV values (e.g., above 3.5) have aligned with market tops, signaling significant overvaluation. Conversely, low values (e.g., below 1.0) tend to coincide with market bottoms, indicating that BTC may be trading below its average cost basis.

Cycle Awareness: By tracking the relationship between market and realized value, MVRV allows investors to spot euphoric price expansions and deep-value accumulation zones — helping to time strategic entries and exits during the Bitcoin cycle.