This is called MVRV Z Score.
it stands for Market Value Raslised Value Z Score.
MVRV z-score shows the market value's relative position to realized value. MVRV going high means Bitcoin is overvalued ( Desired) ; going low means undervalued, ( being less desirable). ( Bitcoin market value - Bitcoin realized value ) / market value standard deviation = MVRV z-score
Realized value is the sum of value when all Bitcoins last moved
The Zscore ( Green) crosses over the MVRV ( yellow) in a real Bull run and tends to lead to ATH
The image shows the period from 2019 to Now. - Note how the Z score got near crossing the MVRV in 2019 ( Arrow ) , retreated and then came back up over at a later date
Also note how the Z Score Peaks BEFORE the PA ATH ( was in March 2021 )
See how it peaked on the 1.272 Fib line.
Then look over to the Right and the Current play.
See how Z Score has come up and tried crossing over the MVRV and failed, same as it di did 2019. This time it did that on the 1.414 Fib line and possibly did so with the push of all the BTC ETF purchasing.
So, while we are producing a similar pattern, things are slightly different. The climb from 0 ( Green lake, VERY under valued ) currently, has been slower and more controlled.
The Real question here is how far the MVRV will retreat. See over on the Left, it came back all the way to 0 by March 2020. Ignore that, it was the Covid Crash and very quickly recovered. However, the drop to the 0.239 is Valid and we need to see if we get there again.
Currently, we have just bounced off the 0.618. That is the realised Value climbing..Or more profit....
Another thing to note here is look how Volatile Both periods are compared to the majority of the Time.
We are definatly building up to something here...
