The MVRV index (market Value to Realized value Ratio) is one of the key tools in bitcoin's fundamental analysis used to evaluate market valuation compared to the actual price held by investors. This indicator can help detect saturation conditions of buying or selling.

Market Capitalization is the total market value of bitcoin, which is obtained by multiplying the current price of bitcoin by the total number of bitcoins in circulation.

Realized Capitalization the actual value of bitcoins is calculated based on the price of their last transaction on the network.

High MVRV (more than 3.5): the high value of this index indicates the overvaluation of bitcoin and the possibility of price correction.

Low MVRV (less than 1): low value this indicator indicates that the market price is lower than the actual value of bitcoins, which usually indicates buying opportunities.

Benefits and limitations of MVRV

Detecting high points and price floors

Provide insight into overall market trends

The impact of short-term investor behavior

Failure to consider macroeconomic factors

The MVRV index is one of the useful tools for understanding the valuation of bitcoin relative to the actual cost of its maintenance by investors. This indicator can help detect price bubbles and market opportunities. However, it should be used alongside other fundamental and technical indicators.