Imagine you have a big jar of marbles that you and your friends have collected over time. The Market Value is like how much all the marbles would be worth if you sold them right now. The Realized Value is like how much your friends paid for their marbles the last time they traded or moved them around.
The MVRV-Z Score is a special number that helps us see if the marbles are being sold for way more than what people paid for them before (which means the price might be too high), or if they are being sold for less than what people paid (which means the price might be a good deal).
Right now, Bitcoin’s MVRV-Z Score is around 2.5, which means the price is a little higher than what people paid before, but not super crazy high. So, it’s kind of like the marbles are a bit more valuable than usual but not at a big bubble or a super cheap sale
- If the score is really high, it’s like saying, “Whoa! The marbles are super expensive now, maybe too expensive, and the price might come down soon.”
- If the score is really low, it’s like saying, “Hey, the marbles are cheaper than usual, maybe it’s a good time to buy some.”
