Transcription
Hey everyone, and thanks for jumping back into the cryptoverse. Today, we're going to talk about the Bitcoin MVRVZ score.
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In this video, we're going to be discussing the MVRV Z-score. And the V, the MVRV Z-score is simply calculated by taking the market cap of Bitcoin minus the realized cap and then dividing that by the standard deviation of the market cap.
One of the things I like about this indicator is that, I mean, it's not always the best at like telling you exactly where the top's going to be. If you look at the past several cycles, like in 2013, you can see it went all the way up to like nearly 10, around 10 that the MVRVZ score. And then in 2021, it it actually topped out at around like seven or so. And um, and then last cycle, it it barely went up, right? It topped out at around like three, which, as we've said, is kind of similar to the 2019 style top, right? That apathetic top.
But what I like about the MVRV Z-score is that when it resets, which it does approximately every four years, it is, you know, it tends to be a a fairly attractive accumulation zone. So after the bull market that Bitcoin had in 2011, the MVRV Z-score reset and it went below zero. Okay, you can see it went below zero. And while it was below zero, that's where, you know, the the market reset.
Now look at it in 2015. You can see in 2015, the MVRVZ score went went below zero, uh, in October. And then it went a little bit below that again in January. Stayed below it for a good part of 2015. And then it went up. And then you look back and you're like, all right, well, when it went below zero, that was a fairly attractive time to accumulate Bitcoin.
And then in 2018, you can see it it fell below zero, and that ended up being a fairly attractive spot to accumulate Bitcoin. It also went below zero in 2020 during the pandemic. And then again in 2022, the MVRVZ score went below zero in the summer, right? So it was in the summertime. And then it basically stayed mostly below zero until essentially 2023.
And then finally, where does that leave us today? Well, to give you an idea of where it is today and where it was previously, it topped out, you know, between three and four. Right now, it's at around 35. So, it's actually getting relatively close to that zero mark. And just remember, below zero has historically been a fairly attractive time to accumulate Bitcoin.
The other thing I'll I'll remind people of as well is with with Bitcoin and the on-chain indicators, it is highly unlikely unless you get a repeat of the pandemic, which is not really base case here, but it's highly unlikely that you would go to these levels and then only stay there for a day. Okay?
If you look in 2022, Bitcoin stayed below the MVRVZ score for the most part between June and six months later, January. Now, it did pop above it for a few weeks here and there, but for the most part, it was down there for a while. That was in 2022. In 2018, we were below the we were below zero essentially from November of 2018 until April of 2019. So you're talking about like five months approximately. And then in the second before that, we were basically below it from late 2014 until late 2015, about a year.
So what it shows is that, you know, a lot of times the investments, the best investments that you make are the quiet investments, like the the the things that you're buying when people just don't care about it and it it's just ignored. And that's why I say accumulating Bitcoin in the second half of midterm years often works out. Now again, you know, if you started accumulating at the very beginning of the second half of midterm years previously, then you know, you're kind of hit or miss on whether the MVRVZ score had fully reset. But a couple of years later, none of that mattered.
Anyways, so I I think this is just one of those indicators. It's just another one to have in your toolkit and to keep an eye on it and and say, you know what, this thing historically resets and and from those reset levels, it then begins a a new bull market, which again, could very well line up with that four-year cycle.
We're going to wrap it up there. We're going to keep this video short and sweet. If you guys like the content, make sure you subscribe, give the video a thumbs up, and also check out the sale on ITCremium at intothecryptoverse.com. I'll see you guys next time. Bye.