Crypto Assets Are Slightly Overbought Right Now, According To MVRV
As per data from the on-chain analytics firm , traders are currently slightly in the green. The relevant indicator here is the “Market Value to Realized Value” (MVRV) ratio, which measures the ratio between the market cap of an asset and its realized cap.
The “realized cap” here is a sort of fair value model that can be applied to any crypto. Since the MVRV ratio compares the value of the asset (the market cap) with this “true value,” the indicator’s value can provide hints about whether the given asset is overpriced or underpriced right now.
Looks like most of the values are in the negative right now | Source:As you can see in the above graph, assets become overbought when the MVRV divergence from the danger zone hits -1. Similarly, the underbought condition takes place at +1.
However, most of the assets haven’t yet hit the danger zone, as the likes of Bitcoin, Ethereum, and XRP have current MVRV divergence values standing at -0.27 or lower. This could mean that their prices may not be at too much risk of a correction currently.
Nonetheless, it still implies that the market as a whole is still carrying some profits at the moment. “Markets move up with the highest probability when traders’ assets are underwater. Currently, they’re mildly over,” explains the analytics firm.BTC Price
At the time of writing, Bitcoin is trading around $24,300, down 1% in the last week.The value of the asset seems to have been consolidating in the last few days | Source: