Bitcoin MVRV Z score tests crucial level after bear market

The MVRV Z score of Bitcoin is at a level that announced the transition from a bear market to a bull market in earlier cycles. An analyst points out that Bitcoin started a new upward phase in 2015, 2019 and 2023 each time this level was reclaimed. Bitcoin currently stands at $78.200, a decline of 1.3% over the past 24 hours.

Bitcoin is available at OKX and Bybit.

In brief:

• Bitcoin’s MVRV Z score is testing its 365-day moving average.
• In earlier cycles (2015, 2019, 2023) this moment marked the start of a new bull market.
• A daily close above this level would be seen as a strong signal.

What the MVRV Z score measures

The MVRV Z score compares the market value of Bitcoin with the so-called realised value: the average price at which all Bitcoin was last moved. The Z score indicates how far the current market value deviates from this historical average. A high score points to overvaluation, a low score to undervaluation.

Two zones are visible on the chart: a red upper zone that historically coincides with market tops, and a green lower zone that coincides with bottoms. The current score sits just above zero and is testing the 365-day moving average of the indicator.

Historical pattern returns

According to an analysis shared on X, the situation shows similarities with three earlier turning points. In 2015, 2019 and 2023, reclaiming the 365-day average each time led to a new upward cycle for Bitcoin.

The analyst states that a daily close above this average can be seen as an important signal. This concerns a technical indicator, not a guarantee. Whether the pattern repeats itself still has to be confirmed by the price.

Earlier we already wrote about the question of whether the current bear market is less severe than that of 2022. The Fear & Greed Index also recently stood at greed for 20 days, which indicates a certain recovery of market sentiment.

What investors are watching now

As long as Bitcoin does not record a daily close above the 365-day average of the MVRV Z score, the signal remains unconfirmed. The price currently stands at $78.200 and shows a slight decline.

Traders are also watching other on-chain signals. For instance, Bitcoin recently rose above the average cost price of short-term holders, which is likewise regarded as a recovery signal. The spot demand must also confirm above $82.000 before analysts speak of a sustainable breakout.