MVRV (Market Value to Realized Value) is a key onchain indicator used to assess whether bitcoin or other cryptocurrency is overvalued (overbought) or undervalued (oversold). The indicator is calculated as the ratio of current market capitalization to “realized” value.
The company claims that the MVRV ratio helps investors objectively analyze how “cheap” or “expensive” the market is at current price levels by measuring their average returns.
“Extremely” and “slightly” undervalued crypto
According to Santiment data based on the MVRV ratio over the past 30 days, Ethereum (ETH) is in the “extremely undervalued” category with a drop of -14.3%. This ratio indicates that the average investor has recently suffered significant losses and, according to the analyst firm, historically such levels can signal long-term buying opportunities, cryptonews.net writes.
On the other hand, some major crypto assets are in the “slightly undervalued” zone. Bitcoin (BTC) is at -6.9%, Chainlink (LINK) is -5.1%, $XRP ($XRP) is -4.1%, and Cardano (ADA) is -2.0%, all of which are among assets where the average investor is suffering losses based on their 30-day MVRV ratios.
According to the company, rather than buying stocks based solely on price declines, historically more favorable opportunities for capital accumulation have been provided by periods where the average wallet suffers significant losses and the MVRV ratio falls significantly below zero.
*This is not an investment recommendation.
