MVRV Z-Score Explained

When looking at MVRV Z-Score, a statistical metric that compares a cryptocurrency’s market value to its realized value and then normalizes the result. Also known as MVRV Z‑score, it helps traders see whether an asset is over‑ or under‑priced relative to its historical average.

The core inputs for the MVRV Z‑Score are the Market Capitalization, the total dollar value of all coins in circulation and the Realized Capitalization, the sum of each coin’s price at the time it last moved. Their ratio forms the MVRV Ratio, a simple price‑to‑realized‑value metric, which the Z‑Score then scales using standard deviation to flag extreme market states. In other words, MVRV Z‑Score requires market cap and realized cap, and it uses the MVRV Ratio as a base.

A high positive Z‑Score (typically above 2) often signals a bubble, while a deep negative score (below –2) hints at a buying opportunity. This semantic link—"high Z‑Score indicates overvaluation" and "low Z‑Score indicates undervaluation"—gives traders a clear on‑chain signal without guessing. The metric works across Bitcoin, Ethereum and many altcoins, letting you compare valuation phases in a single framework.

How to Use the MVRV Z‑Score

Practically, you start by pulling the latest market cap and realized cap from an on‑chain data provider, compute the MVRV Ratio, then apply the Z‑Score formula. Once you have the number, watch for spikes above 2 as potential exit points and dips below –2 as entry cues. Below you’ll find in‑depth articles that break down the metric, compare it across major cryptocurrencies, and show step‑by‑step ways to fit it into your trading plan.