Bitcoin slips into ‘cheap zone’ as MVRV drops to 1.1

CryptoQuant analysts report bitcoin’s market-value-to-realized-value ratio dropped to about 1.1, the lowest reading since March 2023. MVRV compares the market value of all coins to their realized value, or the price paid for coins the last time they moved. A reading below 1 indicates the average holder is holding at a loss.

CryptoQuant said the current MVRV sits just above the band its model treats as undervalued. The firm noted that similar low readings have appeared before large recoveries. After the market stress following the collapse of FTX in late 2022, bitcoin entered a similar valuation zone and then rose roughly 67% over the subsequent three months.

A related measure, the MVRV Z-score, has fallen toward levels lower than those recorded at previous cycle lows in 2015, 2018, 2020 and 2022, indicating compressed valuations compared with past bottoms.

Bitcoin briefly recovered from intraday lows near $59,000 to trade around $64,000 before pulling back. On-chain data showed more than half of bitcoin’s circulating supply was in unrealized loss at the recent low, a condition that has accompanied prior bear-market troughs.

CryptoQuant cautioned the current cycle differs from earlier ones because bitcoin did not first run to a very overvalued peak and then collapse. The firm said a low MVRV reflects compressed valuations but does not guarantee an immediate reversal.

Analysts also flagged ongoing distribution from medium-term holders as a factor that could prolong selling pressure. Market models such as MVRV are used alongside other indicators to assess risk, and whether the low valuation reading marks a durable floor will depend on macroeconomic and geopolitical developments, including changes in U.S. interest-rate expectations and tensions in the Middle East.