Bitcoin MVRV Z-Score – Not yet at the "historical peak", opportunity still awaits
MVRV Z-Score measures the gap between market price and average purchase price on-chain, helping to detect extreme profit/loss zones. History shows three times when Z-Score surged above 10 (peaks in 2013, 2017, 2021) followed by significant corrections. Currently, the Z-Score is around 2–3, meaning Bitcoin has not yet entered an overly profitable phase; on the contrary, there is still room for growth.
Three reasons to pay attention
Low average profit level: A Z-Score of 2–3 reflects that most holders are in profit but not too heated, reducing the pressure for massive profit-taking.
Comparing with the past: In previous bull runs, prices continued to explode after the Z-Score exceeded 2, rather than reversing immediately. The current outlook may repeat the scenario: early profits are a good time to increase positions.
New capital inflow: On-chain reports show that the number of UTXOs purchased from the bottom of 20–22k is still being held, with no significant profit-taking, implying confidence in the medium-term trend.
Personal strategy
Dollar-cost averaging: I continue to accumulate BTC weekly, not timing the bottom, taking advantage of the Z-Score not exceeding warning levels.
Spot hedging: With tech stocks, I increase hedging by going long on BTC, as the risks in the tech and crypto sectors are inversely correlated.
Do not rush to short BTC when Z-Score <5; wait until it reaches the 7–8 range before considering defensive measures.
In summary, Bitcoin has not given a "cycle peak" signal on-chain. The Z-Score range of 2–3 presents an opportunity to increase positions with tightly controlled risk. Only when Z-Score approaches the threshold of 8–10 will I begin to gradually reduce positions to preserve profits.
This article represents personal opinion, not investment advice.
