Indicator Overview

The indicator is the Active Market Value to Realised Value (Active MVRV) ratio. This metric compares the current Market Price to the Active Realised Price.

The Active Realised Price is a modified measure of the aggregate cost basis of the Bitcoin supply, specifically excluding coins that have been dormant for an extended, long period (e.g., more than 5 years). This focuses the Realised Value calculation on the cost basis of the more active and responsive part of the market. A value above 1.0 means the current price is above the average cost basis of the active supply. A value below 1.0 means the current price is below the average cost basis of the active supply.

How To Use

The Active MVRV ratio acts as a highly sensitive gauge of the active market's aggregate profitability and financial stress.

Significant readings well above 1.0 signal that the active market participants are sitting on substantial unrealised profits, suggesting market saturation or peak short-term euphoria. These levels increase the incentive for profit-taking and can precede a price correction or a local top.

Conversely, sustained readings below 1.0 indicate that the average active participant is holding at an aggregate loss. This typically signals a period of deep conviction re-accumulation or heavy capitulation, where the most responsive holders are being shaken out. Breaking back above 1.0 is a key bullish signal, confirming that the active market has returned to an overall profitable state and suggesting the low of the market cycle has been established.