Recently, I’ve been studying some reliable on-chain indicators and found that the MVRV Z-Score tool is quite interesting. It has accurately indicated local tops and bottoms over the past four cycles.

In simple terms, MVRV measures the difference between Bitcoin’s market value and the realized value of all holders. The larger this gap, the more likely the market is either overheated or severely undervalued.

Market value is straightforward—current price multiplied by circulating supply—but this number is especially susceptible to FOMO, news sentiment, or leverage. Realized value, on the other hand, tracks the price at which each Bitcoin last moved on-chain. Every time BTC moves, it usually represents an economic decision—buying, selling, transferring, or storing—so this value can genuinely reflect holders’ true intentions. For example, a wallet that has been holding since 2020 has its cost basis locked in at that time.

The Z-Score’s role is to quantify the deviation between market value and realized value. When the deviation is too large, it indicates abnormality; when it’s too small, it suggests the market is compressed.

When the MVRV Z-Score enters the red zone, it means the market value is far above the realized value, and long-term holders are all in profit. At this point, they are motivated to take profits, and the market is in an extremely euphoric state. Conversely, when it enters the green zone, the market value is far below the realized value, indicating long-term holders are at a loss. This is usually a sign of accumulation phase.

I personally think using the MVRV logic to judge the bottom in 2026 is quite reliable. What are your thoughts?