MVRV Ratio: What It Tells You About Crypto Market Cycles

When you hear traders talk about the MVRV ratio, a metric that compares the current market value of a cryptocurrency to the total value of all its coins when they were last moved. Also known as Market Value to Realized Value, it's one of the few on-chain indicators that actually shows whether the market is overbought or oversold based on what people paid, not just what it's trading for today. Unlike simple price charts, the MVRV ratio cuts through hype by asking: Are people selling because they’re making big profits, or are they panic-selling after losing money?

This metric matters because it reveals hidden behavior. When the MVRV ratio spikes above 3.7, it often means most holders are in profit — a classic sign of a market top, like Bitcoin did before its 2017 and 2021 crashes. When it drops below 1, it means the average holder is underwater — a signal that most have already given up, which historically precedes major rallies. You won’t find this in news headlines, but top crypto analysts track it religiously because it doesn’t lie. It’s built from blockchain data: every time a coin moves, its cost basis gets updated. That’s the "realized value" — the sum of what every holder originally paid. The "market value" is just current price times total supply. The ratio between them tells you the crowd’s emotional state.

The MVRV ratio doesn’t work in isolation. It’s often paired with on-chain metrics, data pulled directly from blockchain ledgers that track wallet activity, transaction volume, and holder distribution. Things like the number of active addresses or the distribution of coins among large holders give context. If MVRV is high but few people are moving coins, maybe the top isn’t near. If MVRV is low and wallets are suddenly waking up, a bounce might be coming. You’ll also see it referenced alongside crypto market cycles, the recurring pattern of bull runs and bear markets driven by adoption, speculation, and macroeconomic shifts. These cycles don’t follow calendars — they follow investor psychology, and MVRV is one of the clearest windows into that.

What you’ll find in the posts below isn’t theory. It’s real examples: how the MVRV ratio warned traders away from fake airdrops like GDOGE and HAI before they collapsed, how it helped spot the real turning points in GMT and StepN’s decline, and why it’s useless for low-liquidity tokens like MATRIX or KALA that have no real trading history. You’ll also see how it ties into risk tools like margin calls and liquidations — because when MVRV is high and people are leveraged, the crash hits harder. This isn’t about predicting the future. It’s about reading the past to avoid repeating the same mistakes.