Adjusted MVRV Analysis
The Adjusted MVRV (Market Value to Realized Value) indicator measures Bitcoin's market valuation relative to its realized value, with adjustments for market cycle dynamics. This heatmap visualization helps identify periods of extreme overvaluation or undervaluation.
Understanding Adjusted MVRV
What is MVRV?
MVRV compares Bitcoin's market capitalization (current price × circulating supply) to its realized capitalization (price at which each coin last moved × circulating supply). This ratio reveals whether the market is trading above or below the aggregate cost basis of all Bitcoin holders, providing insight into overall market profitability.
Adjustment Methodology
The adjusted version incorporates additional factors such as market cycle position, long-term holder behavior, and volatility adjustments to improve signal reliability. These adjustments help account for Bitcoin's evolving market structure and reduce false signals during transitional market phases.
Heatmap Zones
The heatmap uses color gradients where cool colors (blue/green) indicate undervaluation and potential accumulation zones. These levels have historically coincided with bear market bottoms. Warm colors (orange/red) signal overvaluation and euphoric conditions that often precede major corrections or cycle tops.
Investment Strategy
Long-term investors use Adjusted MVRV to gauge risk-reward ratios across market cycles. Extended periods in cold zones suggest favorable long-term entry points with limited downside, while extreme hot zones indicate elevated risk and may warrant profit-taking or position reduction. The dual-panel layout allows easy correlation between price action and valuation metrics.