The metric shows bitcoin's market price is getting close to its realized fair value after the recent sell-off.
And right now, it is knocking on the door of the zone that has coincided with the lowest point of previous bear markets. It happened in 2011-2012 when bitcoin saw its first major crash. It happened again in 2014 and late 2018. Most recently, it fell below zero in the second half of 2022, marking a price bottom that paved the way for a three-year bull run.
The metric compares the deviation of bitcoin's market value – what the token is worth right now based on the current market price – from it's realized price.
The second figure, widely considered close to fair value, is obtained by averaging the prices of every bitcoin since the last time it was transacted onchain.
When the market price is far above fair value, bitcoin is considered expensive relative to its own history. When the market price falls toward or below the fair value, bitcoin is cheap. The Z-Score takes the difference between those two numbers and measures how extreme it is statistically.
The result is a single line that cuts through the noise of day-to-day price action and shows where the price is relative to the broader market cycle. A high Z-Score means the market is running hot, and a low or below-zero score means the opposite.
According to BitBo, the Z-Score is currently at 0.24, just above the upper boundary of the historically significant "green zone," which begins at approximately 0 and extends slightly below zero.
In other words, it's very close to the "accumulation" zone. To be clear, this is not a price level, but only a measure of how stretched or compressed bitcoin's market value is relative to its realized value
However, currently, STH-MVRV stands at 0.84, while LTH-MVRV remains elevated at 1.29. Meaning long-term holders are still sitting on relatively large unrealized profits, indicating that further downside in bitcoin may be required before a typical bear market bottom is established.
While it is impossible to time market bottoms, after the brutal selling last week that wiped hundreds of billions off crypto's market value, conditions that have historically preceded recoveries are beginning to emerge.
#BitcoinBreaksAbove$63K #IsraelStrikesIranMilitaryTargets #SaylorHintsStrategyBitcoinBuy #SyscoinBridgePausedAfterExploit #IranStrikesIsraelOilPriceRises