{"uuid":"da3ef820-dcdb-4e7e-6a40-28dcf16ba334","categoryUuid":"7da7918d-5648-48ec-7267-812a87fac227","data":{"meta":{"name":"ETH: Mastering the MVRV Ratio"},"configs":[{"meta":{"content":"## 〰️ Mastering the MVRV Ratio 〰️\n---\n\nThe MVRV Ratio is one of the most popular and widely used on-chain metrics. It was first conceived by on-chain pioneers Murad Mahmudov and David Puell, in a [paper released in October 2018](https://medium.com/@kenoshaking/bitcoin-market-value-to-realized-value-mvrv-ratio-3ebc914dbaee), and has become a staple on-chain analysis tool ever since.\n\nThe MVRV Ratio is often viewed as a macro oscillator, useful for exploring Ethereum market cycles, and particularly for spotting tops and bottoms. Whilst this is true, the MVRV is actually a far more nuanced, and information dense metric than many analysts realize.\n\n**📰 Read our full report here: [Mastering the MVRV Ratio](https://insights.glassnode.com/mastering-the-mvrv-ratio/).**\n\n---\n\nIn this dashboard, we explore the MVRV Ratio, starting at the foundations, and traveling right through to more advanced insights. Our goal is to demonstrate the mechanics that make MVRV tick, and explore what makes this indicator such a powerful tool in our belt. We will cover three topics:\n\n1. **Exploring Extreme Values** of the MVRV for spotting cycle tops and bottoms.\n\n2. **MVRV Momentum** and how to use the indicator to track macro bull/bear trends.\n\n---\n\nMVRV is shorthand for Market Value (MV) to Realized Value (RV), and is the ratio between Price, and the Realized Price. Since the Realized Price is the average price at which every coin last moved on-chain, MVRV can be thought of as a measure of 'Unrealized Pofit' held within the supply.\n\n- **A MVRV of 2.2** means Price is 2.2x the Realized Price (120% Profit) \n\n- **A MVRV of 1.0** means Price is equal to the Realized (Break-Even) \n\n- **A MVRV of 0.8** means Price is 0.8x the Realized Price (-20% Loss)\n\n- **High MVRV Values (\u003e 2.4)** ↗️ indicate the market holds large unrealized profits.\n\n- **Low MVRV Values (\u003c 1.0)** ↘️ indicate the market holds unrealized losses."},"uuid":"9917758b-02df-43b9-89eb-b58365611fa5","extra":{"backgroundColor":"#ffffff"},"configType":"content"},{"meta":{"date":1677110400000,"asset":"ETH","since":1279324800000,"until":1677110400000,"currency":"native","metricCode":"market.Mvrv","resolution":"24h"},"uuid":"cdc4070e-5386-4dca-8a59-abcf322f76ec","extra":{"price":true,"scale":"lin","lineColor":"#627eea","chartStyle":"line"},"configType":"metric"},{"meta":{"refUuid":"6cfcbd4f-b728-4618-673d-0d87ceeed439"},"uuid":"00859b95-4c4d-4ed1-9dc7-d5066be96c04","configType":"workbench"},{"meta":{"refUuid":"62d66476-6e91-4f39-40d4-b058f5ac26e0"},"uuid":"d2135a88-8d05-446e-b8cc-8bd5a8e3c0ad","configType":"workbench"},{"meta":{"content":"## Exploring Extreme Values\n---\n\nThe next question is, what classifies as a high, and a low value of MVRV? How can we measure extreme deviations associated with cycle tops and bottoms?\n\nFirst we will start visually, where we have marked out MVRV levels at 0.8 🔵, 1.0 🟢, 2.4 🟠, and 3.2 🔴. These appear, at least initially, to align well with tops and bottoms. However, we will need to make this analysis a little more robust than eyeballing levels in if we want to properly master the MVRV.\n\nA simple approach is to calculate the proportion of days through history where MVRV has traded below, or above these levels. We can calculate and show this using Workbench. If MVRV has only been below a particular level for 10% of trading days, that means it has been above it for the other 90%, making that scenario more likely."},"uuid":"4022e040-bd8c-44c1-83b2-1f185329a4f3","extra":{"backgroundColor":"#ffffff"},"configType":"content"},{"meta":{"refUuid":"ab670a1e-fd4d-4757-47f5-b5b77bdf7c28"},"uuid":"add422a1-ab16-438b-b90e-63f494bc7092","extra":{"zoom":"5y"},"configType":"workbench"},{"meta":{"refUuid":"c2b1654a-d980-440c-699a-3d1cbe30575f"},"uuid":"8097a505-3567-4d2c-b02b-22c7e882f2fc","configType":"workbench"},{"meta":{"refUuid":"0a70936f-24c9-4d7d-4f10-2c59ae22e0df"},"uuid":"b9c7bd0b-1211-46de-988f-564496069bce","extra":{"zoom":"5y"},"configType":"workbench"},{"meta":{"content":"## MVRV Pricing Bands\n---\n\nNow that we have defined a set of 'extreme levels' for MVRV, we can visualize these as pricing bands. If the MVRV Ratio equals 2.4, that means the corresponding pricing band is 2.4x the Realized Price.\n\nThis tool now allows us to estimate price levels where the market would reach an extreme unrealized profit (high values), or unrealized loss (low values). Reaching these prices may increase the likelihood that investor behavior is triggered (like profit taking, or capitulation), which ultimately is what establishes the cycle top/bottom we are looking for.\n\nNow we can better quantify how likely it is for these MVRV levels to be breached:\n\n- 🔵 **Extreme Lows:** MVRV has been Below 0.8 for around 20% of trading days.\n\n- 🟢 **Getting Low:** MVRV has been Below 1.0 for around 30% of trading days.\n\n- 🟠 **Getting High:** MVRV has been Above 2.4 for around 20% of trading days.\n\n- 🔴 **Extremely High:** MVRV has been Above 2.4 for around 6% of trading days."},"uuid":"8cc1cb66-61b3-45ab-81bc-8ae0e3fc6993","extra":{"backgroundColor":"#ffffff"},"configType":"content"},{"meta":{"content":"## Statistical Deviation Bands\n---\n\nWe can also calculate a set of statistically significant deviation bands related to the MVRV Ratio. Both the all-time cumulative mean, and the 4yr mean are shown in blue. Upper and lower bands are then computed from these levels representing +/- 1 standard deviation.\n\nThe chart below presents the MVRV Ratio color coded depending on the degree of deviation from the all-time cumulative mean. Upper and lower bands are then computed from these levels representing +/- 0.5 to 1.0 standard deviations.\n\nThe following market cycle phases are presented:\n\n- 🔵 MVRV \u003c -1.0σ\n- 🟢 -1.0σ \u003c MVRV \u003c -0.5σ\n- 🟡 -0.5σ \u003c MVRV \u003c +0.5σ\n- 🟠 +0.5σ \u003c MVRV \u003c +1.0σ\n- 🔴 MVRV \u003e +1.0σ"},"uuid":"595f791a-98e6-4916-9501-724152841aa4","extra":{"backgroundColor":"#ffffff"},"configType":"content"},{"meta":{"refUuid":"6b7c397d-2c99-45a4-741a-53a6c396d278"},"uuid":"06fca863-62dc-488a-95ab-e754a6439060","extra":{"zoom":"All"},"configType":"workbench"},{"meta":{"refUuid":"328846c2-d5e1-44bb-6785-11e3c5373922"},"uuid":"3246b004-c02f-4dea-bc7a-377bfd5701f9","configType":"workbench"},{"meta":{"refUuid":"2c8e41c3-1e96-46c2-42b9-5adc26e75fdb"},"uuid":"42d9d6a6-6871-4732-a384-33ccfaf2fb27","extra":{"zoom":"5y"},"configType":"workbench"},{"meta":{"content":"## Statistical Deviation Pricing Bands\n---\n\nThis chart presents pricing bands derived from the MVRV Ratio based on the degree of deviation from the all-time mean. Upper and lower bands are computed from levels representing +/- 0.5 to 1.0 standard deviations.\n\nThe following market cycle phases are presented:\n\n- 🔵 -1.0σ\n- 🟢 -0.5σ\n- 🟡 Mean\n- 🟠 +0.5σ\n- 🔴 1.0σ"},"uuid":"8c41fd23-3a71-4ed2-99a2-60e5c02a4b32","extra":{"backgroundColor":"#ffffff"},"configType":"content"},{"meta":{"content":"## MVRV Momentum and Cycle Trends\n---\n\nThe previous section explored using MVRV to identify cycle extremes. Next we will use MVRV as a tool for identifying macro market trends.\n\nThis chart presents the MVRV Ratio 🔵 alongside the 180-day simple moving average 🔴 as a gauge for momentum. Periods where MVRV trades above the 180-day SMA typically describe macro market uptrends, and periods below describe downtrends. Cycle transition points are often characterized by the MVRV breaking strongly across the 180-day SMA threshold:\n\n- ⬆️ **Strong Breaks Above** 🟩 indicate large volumes of ETH were acquired below the current price, and is now in profit **(describing heavy accumulation near the lows)**.\n\n- ⬇️ **Strong Breaks Below** 🟥 indicate large volumes of ETH were acquired above the current price, and is now in loss **(describing heavy distribution near the top)**."},"uuid":"1c8b0acf-90b0-43d3-9270-3b206a24eca1","extra":{"backgroundColor":"#ffffff"},"configType":"content"},{"meta":{"refUuid":"7614d5f7-a62e-4ad6-7066-ab5b03bcd8dc"},"uuid":"fe0c7560-8768-4008-8fab-4721694b2de3","configType":"workbench"},{"meta":{"content":"## MVRV Momentum Oscillator\n---\n\nWe can convert this observation into an oscillator by taking the ratio between MVRV, and the 180-day SMA. This tool is particularly useful at spotting these very sharp transitions that occur at cycle turning points.\n\n- 🐻 **Start of the Bear:** Sharp declines (and negative values 🟥) indicate large volumes of supply have been recently transacted at higher prices, and have now fallen into an unrealized loss. This suggests a 'top heavy' market which may be sensitive to price declines.\n\n- 🐂 **Start of the Bull:** Sharp increases (and positive values 🟩) indicate large volumes of supply have been recently transacted at lower prices, and have now returned into an unrealized profit. This suggests a 'bottom heavy' market following heavy capitulation, into accumulation.\n\nKey transition points in past cycles are shown as a gauge for how responsive the MVRV Momentum Oscillator can be to macro cycle changes."},"uuid":"90339b85-2c6c-450f-a171-338a33b94d4e","extra":{"backgroundColor":"#ffffff"},"configType":"content"},{"meta":{"refUuid":"23272954-b9ab-4ca0-4da7-2c92d20f9417"},"uuid":"7aea681c-78bf-429d-8262-727818aaafdc","configType":"workbench"},{"meta":{"content":"### Disclaimer\n---\n\n*This dashboard and associated content does not provide any investment advice. All data is provided for information purposes only. No investment decision shall be based on the information provided here and you are solely responsible for your own investment decisions. For for details, please refer to our [Terms and Conditions](https://studio.glassnode.com/terms-and-conditions).*"},"uuid":"5805bc51-f9df-4cd5-b1e1-997e5e70b6a7","extra":{"backgroundColor":"#ffffff"},"configType":"content"}],"layouts":[{"h":8,"i":"9917758b-02df-43b9-89eb-b58365611fa5","w":4,"x":0,"y":0,"minH":1,"minW":3,"moved":false,"static":false},{"h":8,"i":"cdc4070e-5386-4dca-8a59-abcf322f76ec","w":8,"x":4,"y":0,"minH":1,"minW":3,"moved":false,"static":false},{"h":8,"i":"00859b95-4c4d-4ed1-9dc7-d5066be96c04","w":6,"x":0,"y":8,"minH":1,"minW":3,"moved":false,"static":false},{"h":8,"i":"d2135a88-8d05-446e-b8cc-8bd5a8e3c0ad","w":6,"x":6,"y":8,"minH":1,"minW":3,"moved":false,"static":false},{"h":8,"i":"4022e040-bd8c-44c1-83b2-1f185329a4f3","w":4,"x":0,"y":16,"minH":1,"minW":3,"moved":false,"static":false},{"h":8,"i":"add422a1-ab16-438b-b90e-63f494bc7092","w":8,"x":4,"y":16,"minH":1,"minW":3,"moved":false,"static":false},{"h":8,"i":"8097a505-3567-4d2c-b02b-22c7e882f2fc","w":12,"x":0,"y":24,"minH":1,"minW":3,"moved":false,"static":false},{"h":8,"i":"b9c7bd0b-1211-46de-988f-564496069bce","w":8,"x":4,"y":32,"minH":1,"minW":3,"moved":false,"static":false},{"h":8,"i":"8cc1cb66-61b3-45ab-81bc-8ae0e3fc6993","w":4,"x":0,"y":32,"minH":1,"minW":3,"moved":false,"static":false},{"h":8,"i":"595f791a-98e6-4916-9501-724152841aa4","w":4,"x":0,"y":40,"minH":1,"minW":3,"moved":false,"static":false},{"h":8,"i":"06fca863-62dc-488a-95ab-e754a6439060","w":8,"x":4,"y":40,"minH":1,"minW":3,"moved":false,"static":false},{"h":8,"i":"3246b004-c02f-4dea-bc7a-377bfd5701f9","w":12,"x":0,"y":48,"minH":1,"minW":3,"moved":false,"static":false},{"h":8,"i":"42d9d6a6-6871-4732-a384-33ccfaf2fb27","w":8,"x":4,"y":56,"minH":1,"minW":3,"moved":false,"static":false},{"h":8,"i":"8c41fd23-3a71-4ed2-99a2-60e5c02a4b32","w":4,"x":0,"y":56,"minH":1,"minW":3,"moved":false,"static":false},{"h":8,"i":"1c8b0acf-90b0-43d3-9270-3b206a24eca1","w":4,"x":0,"y":64,"minH":1,"minW":3,"moved":false,"static":false},{"h":8,"i":"fe0c7560-8768-4008-8fab-4721694b2de3","w":8,"x":4,"y":64,"minH":1,"minW":3,"moved":false,"static":false},{"h":8,"i":"90339b85-2c6c-450f-a171-338a33b94d4e","w":4,"x":0,"y":72,"minH":1,"minW":3,"moved":false,"static":false},{"h":8,"i":"7aea681c-78bf-429d-8262-727818aaafdc","w":8,"x":4,"y":72,"minH":1,"minW":3,"moved":false,"static":false},{"h":4,"i":"5805bc51-f9df-4cd5-b1e1-997e5e70b6a7","w":12,"x":0,"y":80,"minH":1,"minW":3,"moved":false,"static":false}]}}