Bitcoin
has reached new peaks of all time just above $ 112,000 on Wednesday, although the increase was only marginal compared to the previous peak. Despite the wave of upward adoption of companies, public companies adding bitcoin to their balance sheets.
The chain data suggests that Bitcoin has more room to operate compared to the summits of the previous cycle. A useful metric in this analysis is the MVRV Z-SCORE, which helps to assess whether bitcoin is overvalued or undervalued compared to what could be considered its fair value.
Unlike a traditional Z score, the MVRV Z-SCORE in a unique way the market value with the value achieved. When the market value, calculated as the network assessment according to the cash price multiplied by the offer, is considerably above the value made, which reflects the influx of cumulative capital in the assets, this has historically pointed out market summits [red zone]. Conversely, when the market value is below the value achieved, it has often indicated the stockings of the market [green zone].
The MVRV Z-SCORE is defined as the ratio between the difference in market capitalization and the ceiling carried out, and the standard deviation of market capitalization, expressed as a [market cap minus realized cap] Divided by the standard difference in market capitalization. The standard deviation is calculated cumulatively from the first data point available to the present day, which makes it a long -term measure.
Currently, the MVRV Z-SCORE is 2.4. In the hollows of the past bear market, Bitcoin recorded scores below zero, as shown by 2015, 2019 and 2022. Meanwhile, cycle peaks historically occurred when the score reached 7 or more, as was the case in 2017 and 2021, according to Glassnode data.
Although it is only a data point, this indicates that Bitcoin always has a significant potential for a new increase compared to previous cycles.
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