Been looking at different on-chain metrics lately and came across MVRV Z-Score.
Seems like it could be useful for timing Bitcoin entries and exits but not sure how reliable it actually is in practice.
Anyone using this indicator regularly in their analysis?
MVRV Z-Score can be helpful but do not depend solely on it. The thresholds change as Bitcoin evolves, and strategies from previous cycles may not apply now. I’ve seen traders miss out on solid gains by waiting for drops that do not occur. During strong bull runs, it often stays high. Use it in conjunction with other indicators. When it reaches extremes, compare it with funding rates, whale activity, and institutional flow. It gives a good sense of sentiment but is not reliable for precise entry and exit timing.
MVRV Z-Score is great for spotting major trends. It’s too slow for day trading but works well for timing broader market moves.
I’ve used MVRV Z-Score for Bitcoin analysis for 3 years. Great for spotting major cycle tops and bottoms, but useless for short-term trades.
It shows when Bitcoin’s extremely over or undervalued vs its realized price. Above 7 = time to take profits. Below -0.5 = accumulation zone.
Exited most of my position in late 2021 when it hit over 6. Started buying again during the 2022 crash when it went negative.
Don’t use it solo though - it can stay high for months during bull runs. I pair it with exchange flows and long-term holder data.
Perfect for swing trading over weeks/months. Completely worthless for day trading since it barely budges.