BTC On-Chain Analysis: Long-Term Indicators Present Healthy Market

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In Brief
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A look at on-chain indicators for Bitcoin (BTC), more specifically MVRV Z-Score, RHODL Ratio and the Puell Multiple. 

When compared to the previous market cycles, all of the indicators suggest that the macro cycle top has not been reached yet.

MVRV Z-Score

MVRV is a ratio created by dividing the market and realized capitalization levels. So, a MVRV reading of 3 shows that the market cap is thrice as large as the realized cap. 

The MVRV Z-Score uses a standard deviation to divide the given ratio. This is done in order to determine the difference between the market and realized capitalizations in terms of standard deviations. 

The 7-9 region (highlighted in red) is considered an overbought region. In it, the market capitalization is between 7 and 9 standard deviations bigger than the realized capitalization. 

The 2021 BTC top had a value of 7.63 (black arrow). However, the three previous market tops all had values above 9, meaning that they went considerably above the upper limit of the region. 

Therefore, according to this indicator, the 2021 top was dissimilar to both 2013 and 2017 tops.

MVRV Z score
Chart By Glassnode


The RHODL ratio is a ratio between the 1 week and the 1-2 year HODL Wave bands, weighed by the total market age.  A high ratio suggests that short-term holders hold a large percentage of the current supply. It has historically been indicative of market tops. 

A high ratio is defined as that between 50,000 – 200,000 (highlighted in red). A low ratio is defined as that between 80 and 300 (highlighted in green). 

Both the 2013 and 2017 BTC tops had high values (red arrows), meaning that they moved inside the red region. Conversely, the 2015 and 2019 bottoms had low values (green arrows), meaning that they were inside the green region.

Interestingly, the 2021 top had a value of 17,700, considerably below the 50,000 lower limit of what is considered a high value. 

So, this indicator also shows that the 2021 top is dissimilar to those in 2013 and 2017.

Realized HODL ratio
Chart By Glassnode

BTC Puell Multiple

The Puell Multiple is a metric that is created by dividing the dollar value of all minted coins with a yearly moving average. It is considered a BTC miner indicator, since it shows regions of low (green) and high (red) profitability for miners.

Values between 4 and 10 (red) have historically signaled market tops. 

The April and Dec. 2013 highs had values of 10.1 and 9.41, respectively. The Dec. 2017 high had a value of 6.72. The 2021 high had a value of 3.43.

Therefore, the 2021 high is dissimilar to those in 2017 and 2013.

On June 27, the indicator reached a low of 0.455 and bounced immediately (green arrow). The low was made inside the low profitability region of 0.3-0.5 (highlighted in green). The two previous times this region was reached were in Jan. 2019 and July 2020, both local bottoms. 

The bounce coincided with the $29,296 BTC low. Therefore, the indicator bounce has also been combined with a price bounce.

BTC Puell Multiple
Chart By Glassnode

For BeInCrypto’s latest Bitcoin (BTC) analysis, click here.


All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.
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Valdrin discovered cryptocurrencies while he was getting his MSc in Financial Markets from the Barcelona graduate school of Economics. Shortly after graduating, he began writing for several different cryptocurrency related websites as a freelancer before eventually taking on the role of BeInCrypto's Senior Analyst.

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