This chart presents two classic on-chain metrics, and some of the most widely recognized, are the Realized Price, and its derivative the MVRV Ratio.

• Realized Price is the average price of the Bitcoin supply, valued at the day each coin last transacted on-chain. This is often considered the 'on-chain cost basis' of the market.

• MVRV Ratio is the ratio between the market value (MV, spot price) and the Realized value (RV, realized price), allowing for a visualization of Bitcoin market cycles, and profitability.

The MVRV Ratio

MVRV is shorthand for Market Value to Realized Value, and it is an oscillator measuring the average Unrealized Profit/Loss multiple held by Bitcoin investors. The average unrealized profit/loss held within the entire coin supply can be calculated as: Avg Unrealized PnL = MVRV - 1

• MVRV value of 2.0 means the current price is 2x the market avg cost basis (average BTC holder is up 2x).

• MVRV value of 1.0 means the current price is equal to the market avg cost basis (average BTC holder is at break-even).

• MVRV value of 0.85 means the current price is -15% below the market avg cost basis (average BTC holder is underwater by -15%).

💡 Hint: Extreme MVRV values to the upside, and downside can help to identify periods where the market is overheated, or undervalued, and where investor profitability has reached a large deviation from the mean (Realized Price).