• The Bitcoin MVRV MACD oscillator is an indicator that measures the ratio between the market cap and the realized cap.
• When the MVRV is greater than 1, it means BTC is overpriced right now, while having values below the threshold suggests it’s underpriced.
• The MACD oscillator of the indicator is the difference between the short-term and long-term exponential moving averages (EMA) of the metric in question.
Bitcoin MVRV MACD oscillator is a powerful tool used by crypto traders and analysts to identify the tops and bottoms of a market. It measures the ratio between the market cap and the realized cap, which is a capitalization model for Bitcoin that values each coin in circulation at the price at which it was last moved. This is different from the normal market cap which takes the same current Bitcoin price as the value of all the coins.
When the MVRV is greater than 1, it indicates that Bitcoin is overpriced at the moment. Values below the threshold suggest that it is undervalued. To use MVRV as a trading tool, the MACD oscillator of the indicator is used. This is the difference between the short-term and long-term exponential moving averages (EMA) of the metric. The EMAs used for this purpose are the 50-day and the 100-day versions.
By plotting the Bitcoin MVRV MACD oscillator, traders can detect both the highs and the lows in the price, as well as the greater trends. This can be seen in the chart below, where the metric seems to have approached a value of 0 recently. Therefore, it is a great tool to have while trading Bitcoin, as it helps to identify potential entry and exit points.