Bitcoin’s MVRV Ratio Nears Three‑Year Low, Hinting at Possible Undervaluation
Crypto on‑chain analytics firm CryptoQuant says the market‑value‑to‑realized‑value (MVRV) metric is approaching its breakeven point for the first time since early 2023, suggesting Bitcoin may be edging into an undervalued zone.
What the MVRV Ratio Shows
The MVRV ratio measures Bitcoin’s current market capitalization against its realized capitalization—the aggregate price at which each BTC was last moved on the blockchain. A reading below 1.0 traditionally signals that the asset is priced lower than the value implied by its historic transaction history, i.e., it is “undervalued.”
Over the past week, the ratio fell to 1.13, its lowest level since March 2023 when Bitcoin was trading around $20,000. At that time, the metric had briefly slipped below the 1.0 threshold. Today, the ratio sits just above the critical line, indicating that price levels are converging on an undervalued territory.
“When the MVRV ratio approaches one, it signals that the market may be catching up to the underlying cost basis of the supply,” said CryptoQuant analyst Crypto Dan. “We are currently hovering near that zone, which historically precedes periods of price recovery.”
Why This Matters Now
Bitcoin’s price has hovered below the $60,000 mark for several weeks, marking a four‑month downtrend that began after the cryptocurrency’s October 2025 all‑time high. The decline has been relatively smooth; the market did not experience a sharp surge into an over‑valued state as seen in prior bull cycles.
Analysts point out that the muted over‑valuation could mean the current correction behaves differently from past market bottoms. “The absence of a classic over‑valued peak changes the dynamics of the downside,” Crypto Dan added.
Z‑Score Signals a Potential Bottom
Beyond the raw MVRV number, CryptoQuant also tracks the Z‑score of the ratio—a statistical measure that normalizes the metric against its historical volatility. Recent Z‑score readings have fallen to levels lower than those recorded during the bottoms of the 2015, 2018, 2020 COVID‑era, and 2022 bear markets.
Crypto trader and analyst Michaël van de Poppe highlighted this descent earlier in the year, noting that “the current Z‑score is deeper than any of the previous major market troughs.”
More recently, CryptoQuant contributor GugaOnChain described the environment as a “capitulation zone,” suggesting that the market is transitioning from panic selling to a phase of accumulation.
“The statistical deviation of the Z‑score screams opportunity, signaling that the bottom of this downtrend is being forged right now,” GugaOnChain wrote.
Key Takeaways
- MVRV Ratio Nears Breakeven: At 1.13, the metric is the lowest since March 2023, close to the 1.0 line that delineates undervaluation.
- Historical Context: The last time the ratio fell below 1.0 corresponded with Bitcoin trading near $20,000, a price point far lower than today’s levels.
- Z‑Score at Historic Lows: The adaptive Z‑score is lower than during previous bear‑market bottoms, indicating extreme deviation from typical market behavior.
- Potential Bottom Formation: Multiple on‑chain signals suggest that Bitcoin may be approaching a bottom, possibly setting the stage for a future price rebound.
- Caution Required: While the metrics point to undervaluation, they are not guarantees of upside. Investors should conduct independent research and consider the inherent volatility of crypto assets.
The analysis presented reflects current on‑chain data and expert commentary. It does not constitute investment advice. Readers are encouraged to perform their own due diligence before making any trading decisions.
Source: https://cointelegraph.com/news/bitcoin-most-undervalued-since-march-2023-classic-btc-price-metric-shows?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound
