MVRV Indicator Reveals the Truth: Bitcoin Cycle Turns, Bull Market Has Entered the Second Half

Bitcoin recently experienced a strong rebound, stabilizing at the 106,000 level. However, based on the trend of the key technical indicator MVRV, the market may be sending a subtle yet important warning signal — we have entered the second half of the bull cycle. Although recent geopolitical risks have temporarily eased and Bitcoin has shown considerable resilience in the short term, the true market turning point may be quietly forming.

Understanding MVRV: How On-Chain Data Uncovers the Truth Behind Prices

MVRV is a highly distinctive relative indicator. Its calculation logic may seem complex, but it reflects the most honest side of the market. This indicator subtracts realized market value from market capitalization and then divides by the standard deviation of market capitalization. The most critical concept is “realized market value” — based on the value of on-chain Bitcoin transactions, it sums up the “last moved value” of all Bitcoin on the chain, simply reflecting investors’ true cost basis.

The formula is: (Market Cap – Realized Market Value) / (Standard Deviation of Market Cap)

The brilliance of this design lies in its ability to distinguish between illusory value driven by market sentiment and the real value supported by actual trading activity. When MVRV rises, it indicates that the premium of market cap over realized value is expanding, meaning the market is overextending future expectations, with prices above on-chain actual cost support. Conversely, low MVRV suggests the market may be undervalued.

Indicator Signals Alert: MVRV Trend Suggests Diminishing Momentum

The reason why technical analysts widely use MVRV is because its historical predictive power is quite reliable. Especially, the slope and turning points of the 365-day moving average line have historically aligned closely with major market cycle tops. Currently, the slope of this moving average is flattening, implying that the upward momentum may be weakening.

This signal is not coincidental. Recently, the US stock indices S&P 500 and Nasdaq hit new highs, but Bitcoin did not follow suit and instead showed obvious relative weakness. This is a direct reflection of the high-level flattening of MVRV — despite nominal prices remaining high, the endogenous driving force behind the price has been waning.

Historical Patterns Confirm: High MVRV Often Marks Cycle Tops

Based on past experience, when MVRV reaches high levels historically, the probability of Bitcoin prices trending downward or undergoing corrections significantly increases. This does not mean an immediate crash, but risks are accumulating, and the danger of chasing highs is rising. Currently, the market is precisely in this warning zone, and all analysts and traders relying on MVRV for cycle judgment should exercise caution.

It’s worth noting that this cycle shows subtle differences from previous bull markets. The explosive price surges of the past did not occur this time; instead, a relatively moderate and more sustainable upward trend has emerged. This may reflect a “damping effect” in price volatility after the expansion of the crypto market’s volume — even with similar market sentiment, larger trading participation and capital scale lead to gentler price movements under the same emotional push.

Deep Market Implications Now: Gentle Rises and Policy Shifts

Currently, BTC price hovers around $89.88K, with a circulating market cap of $1795.74B. These figures indicate the market remains at a historical high. However, the trend of MVRV suggests that this high is beginning to show signs of fatigue. This turning point coincides with the Fed restarting its rate cut cycle, raising the question of whether market expectations for rate cuts have already been partially priced in.

The other side of the gentle rally is the rationalization of market participants’ expectations for the future. The entry of large institutions has changed the market structure; they prefer to consolidate after establishing positions rather than chase highs frantically. This structural change in the market is precisely the signal that MVRV can detect early.

Risk Reminder: How to Respond to Potential Corrections

MVRV does not necessarily predict an imminent downturn, but it does suggest we may be entering a phase where caution is warranted. The key is understanding the significance of MVRV signals: it’s a cycle alarm, prompting investors to adjust expectations and allocation strategies.

Effective capital allocation and risk management are crucial. This means:

• Reducing aggressive chasing in high MVRV environments
• Maintaining liquidity to respond to potential corrections
• Monitoring whether each rally is driven by new capital or just rotation of existing funds
• Watching for shifts in the slope of MVRV, which could be a sign of a genuine turning point

In summary, as a highly distinctive cycle indicator, MVRV’s current trend has sent a clear signal to the market — Bitcoin’s cycle has shifted from a broad rally to a selective phase, from indiscriminate growth to structural differentiation. Grasping this window and understanding the logic behind MVRV will enable smarter decision-making in a changing market.