How to Use the MVRV Z-Score to Spot Bitcoin Tops and Bottoms

Key Takeaways

• The MVRV Z-Score is a proven tool for identifying market tops and bottoms throughout Bitcoin’s history.
• A Z-Score above 7 has consistently aligned with major Bitcoin price peaks, while near-zero or negative Z-Scores often signal undervaluation.
• Currently, the Z-Score is at 2.46, suggesting Bitcoin is testing a critical resistance level within the 2025 bull market.
• ETF flows and diminishing highs may temper this cycle’s peak compared to previous cycles, reinforcing the need for a multi-indicator approach.

The MVRV Z-Score is a valuable on-chain metric for Bitcoin traders, which offers insights to identify key opportunities for maximizing profits by mapping BTC’s fair value. It’s a straightforward and historically reliable tool.

The current MVRV Z-Score stands at 2.43 (as of June 4, 2025), offering insights into Bitcoin’s valuation and whether it may be overvalued or undervalued at this level.

Historically, buy signals have emerged when the Z-Score is near zero or negative, while sell signals around seven have consistently marked major market tops.

The article breaks down the significance of Bitcoin MVRV Z-Score, shedding light on what it suggests about BTC’s valuation in the current market.

What Is the MVRV Z-Score

The MVRV Z-Score is calculated by measuring how far Bitcoin’s market cap deviates from its realized cap, standardized through the standard deviation of market cap. In simple terms, it shows how much the current market price differs from what investors historically paid, adjusted for normal market fluctuations.

MVRV Z-Score is calculated by using below formula :

• MVRV-Z Score = (circulation market capitalization – realized market capitalization) / Standard Deviation (circulation market capitalization)

Based on the above formula, the MVRV Z-Score compares Bitcoin’s current market value to its realized value (based on purchase prices) and adjusts for normal market fluctuations using standard deviation. This helps identify if Bitcoin is overvalued or undervalued by showing how far the current price deviates from its average cost basis.

This on-chain metric highlights whether Bitcoin is overvalued (high Z-Score) or undervalued (low Z-Score) compared to historical trends. In past cycles, an MVRV Z-Score above seven has reliably signaled market tops, reaching 10 twice, 8 twice, and 7 once, suggesting that a level around 7 could be expected in 2025.

Historical Context: MVRV Z-Score in 2017

Examining the 2017 bull market reveals important insights into the predictive power of the MVRV Z-Score. For most of 2017, Bitcoin’s MVRV Z-Score ranged around 2.5, oscillating between 3.06 and 1.45 from January to May. 

During this early period, Bitcoin’s price moved from around $943 in January to approximately $1,363 by May 2017, reflecting a phase of consolidation with resistance and support defined by these MVRV levels of 3-1.

As Bitcoin’s price began to climb more aggressively in late 2017, momentum built steadily. On May 2, the Z-Score decisively broke above 3, flipping resistance into support and signaling the start of a more powerful uptrend. This shift in momentum was crucial; by June 6, the Z-Score had climbed to 5.81, while Bitcoin’s price reached around $2,900. However, this increase was briefly interrupted as the Z-Score dipped to 2.18 in mid-July, coinciding with Bitcoin’s temporary retracement to around $1,900.

By November 26, 2017, the Z-Score had regained its June high of 5.81, mirroring Bitcoin’s dramatic price rise when BTC hit $7,700. The upward momentum a month later, on December 6, took the Z-Score to 8.22 while Bitcoin’s price topped at $20,000. This was the 2017 high, which was later broken in 2021. The MVRV-Z Score was a clear signal that the market was entering overvaluation territory, providing an early warning for investors to consider locking in profits.

After peaking in December, the momentum reversed sharply. The MVRV Z-Score collapsed from 8.22 to -0.49 by December 18, 2018, reflecting a capitulation phase as Bitcoin’s price plunged from $20,000 to a low of $3,400. This dramatic drop in both the Z-Score and Bitcoin’s price underscored that the asset had moved into a phase of significant undervaluation.

The 2017 cycle highlights how the MVRV Z-Score effectively identifies key turning points in Bitcoin’s market cycle, allowing investors to plan exits near market tops and reallocate capital during periods of undervaluation. 

Bitcoin MVRV-Z Score in 2025

As of June 4, 2025, the MVRV Z-Score has been fluctuating between 3 and 1 since March 2024 and currently stands at 2.46. This persistent range suggests that Bitcoin may be nearing the end of its consolidation phase within the 2025 bull market. 

Historically, a Z-Score above 3 that holds as new support has often signaled a shift in momentum and a potential price rally. In such a scenario, the next resistance levels historically cluster around 5 and then the 7–10 region.

If Bitcoin decisively breaks above this level and establishes it as support, historical precedent suggests the Z-Score could climb toward 5, a level associated with historical market tops. However, given the trend of diminishing highs and the ETF-driven complexities, it’s possible that this cycle’s peak may not reach the traditional sell zone (above 7). 

Instead, we may see a peak closer to 5 or 6, still significant but not as extreme as previous cycles. This dynamic suggests a more tempered bull market compared to the wild rallies of 2013 or 2017. Unless BTC goes parabolic to a million, which would likely send it into the sell area.

How Bitcoin ETFs Are Impacting the Accuracy of the MVRV Z-Score

The rise of Bitcoin ETFs has introduced a new challenge in interpreting the MVRV Z-Score’s signals. With more Bitcoin being held and transacted through ETFs rather than on-chain wallets, a significant portion of market activity doesn’t register in traditional on-chain data as much as it did in the past. 

While the MVRV Z-Score remains a robust tool, these ETF flows might dampen its precision, creating discrepancies between what the Z-Score suggests and what’s happening in the broader Bitcoin market. 

This doesn’t invalidate the MVRV Z-Score but underscores the importance of integrating it with other market indicators and macroeconomic data to get a comprehensive picture.

MVRV Z-Score 2.43: What It Means for Bitcoin Traders and Investors

For investors and traders, the MVRV Z-Score’s current level of 2.43 is an inflection point, historically associated with breakouts that can lead to accelerated market momentum.

To strengthen this strategy, the MVRV Z-Score can be complemented with other tools like the Pi Cycle Top indicator, which uses the relationship between moving averages to identify potential cycle peaks. 

Combining these insights with derivatives data, sentiment analysis, and macroeconomic trends creates a more holistic approach to navigating Bitcoin’s evolving market dynamics.

Limitations of the MVRV Z-Score Indicator

The MVRV Z-Score is a popular on-chain metric used to assess Bitcoin’s market valuation, but it comes with important limitations to consider, including:

• ETFs and custodial holdings: With the rise of Bitcoin ETFs and institutional custodians, a significant portion of BTC is held off-chain. These holdings aren’t reflected in on-chain data, which can reduce the accuracy of the MVRV Z-Score in capturing true market dynamics.
• No macroeconomic context: The MVRV Z-Score is based solely on on-chain and historical data, and doesn’t factor in external influences like interest rates, regulation, or geopolitical events that affect price movements.
• Lagging indicator: It may confirm market tops or bottoms only after the trend has begun, limiting its usefulness for timely trade decisions.
• Less effective in sideways markets: During periods of low volatility or consolidation, the indicator can remain in neutral ranges, offering fewer clear signals.
• Historical dependency: The Z-Score relies on past cycle behavior, which may not always predict future price action accurately, especially as the market evolves.
  

Conclusion

The MVRV Z-Score is currently hovering near the critical resistance level of 2, signaling a range-bound phase. A breakout above this threshold has historically aligned with sharp increases in Bitcoin’s market valuation, often approaching cycle tops. However, the growing influence of ETFs, combined with softer historical highs, suggests that any rally this cycle could be more gradual and less dramatic than in previous ones.

Ultimately, while the MVRV Z-Score remains a powerful tool for timing Bitcoin market phases, investors should use it as part of a comprehensive toolkit, blending on-chain data with macroeconomic and derivatives insights to navigate the evolving landscape of the 2025 bull market.

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