An increase in the ratio might signal a good time to take profits, while a decrease could indicate a buying opportunity.

MVRV Ratio:

The red line represents the market capitalization ratio to realized capitalization.

👉 Neutral Zone: When the MVRV ratio is around 1, Bitcoin is fairly valued based on the average acquisition price of all coins in circulation.

📈 Overvalued Zone: A higher MVRV ratio suggests that Bitcoin might be overvalued, and holders are likely in profit, which could lead to increased selling pressure.

📉 Undervalued Zone: A lower MVRV ratio indicates that Bitcoin might be undervalued, suggesting a good buying opportunity as the market value is below the realized value.