Bitcoin Now Undervalued For 170 Days, How Does This Compare With Previous Bears?

On-chain data shows Bitcoin has been undervalued for 170 days now, here’s how this figure compares with that during the previous bear markets.

Bitcoin MVRV Ratio Has Been Stuck Under ‘1’ Since 170 Days Ago

As pointed out by an analyst in a CryptoQuant post, the lowest point that the MVRV ratio has gone in this bear so far is 0.74.

The “MVRV ratio” is an indicator that measures the ratio between Bitcoin’s market cap and its realized cap.

Here, the “realized cap” is a BTC capitalization model where each circulating coin’s value is taken as the price at which it was last moved/sold. All these values are then summed up for the entire supply to get the worth of BTC.

This is unlike the normal market cap, where all the coins are given the same value as the current Bitcoin price. The usefulness of the realized cap is that it acts as a sort of “real value” for the crypto as it takes into account the cost-basis of each holder in the market.

Thus, a comparison between the two caps (which is what the MVRV ratio is) can tell us whether the current BTC price is undervalued or overvalued right now.

The below chart shows the trend in the Bitcoin MVRV ratio over the last several years:

The value of the metric seems to have been below one in recent days Source: BTCUSD on TradingViewFeatured image from Maxim Hopman on Unsplash.com, charts from TradingView.com, CryptoQuant.com

Tags: bitcoinBitcoin bearbitcoin bear marketBitcoin MVRV RatioBitcoin Realized CapBitcoin Undervaluedbtcbtcusd

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