Bitcoin Nears Undervalued Zone: Why the MVRV Ratio Signals a Buying Chance

Key Takeaways

• Bitcoin's MVRV ratio is at ~1.10, edging toward the historic undervalued threshold of 1.00.
• The Mayer Multiple sits near 0.60 and the price is ~15% above the 200‑week moving average, both classic bottom indicators.
• Sector‑wide sentiment shows increased accumulation, but macro‑risk and regulatory headlines could mute upside.
• Historical cycles suggest a potential 3‑6 month rally if the price re‑enters the valuation sweet spot.
• Investor playbook: allocate modest exposure now, watch for a break above $70k as a bullish trigger; stay defensive if the MVRV drops below 0.95.

You’ve just missed the last crypto bottom—don’t let this one slip by.

Bitcoin (BTC) is now trading around $67,300, and two of the most respected on‑chain metrics are whispering that the market may be transitioning from distribution to accumulation. CryptoQuant contributor “Crypto Dan” flagged the MVRV (Market Value to Realized Value) ratio at roughly 1.10, a level that historically precedes a period of undervaluation and, consequently, a risk‑reward sweet spot for long‑term investors.

Why Bitcoin’s MVRV Ratio Near 1.1 Signals Potential Undervaluation

The MVRV ratio compares Bitcoin’s market capitalization (what the market is willing to pay today) with its realized capitalization (the aggregate price at which each coin last moved). When MVRV < 1, the market is, on average, paying less than the price holders have historically realized—an objective definition of “undervalued.” A ratio of 1.00 is a psychological boundary; values above it suggest modest overvaluation, while values below it hint at buying opportunities.

Crypto Dan notes that the current 1.10 reading is a hair’s breadth from the historic “undervalued zone” where the ratio repeatedly dipped below 1.00 before the major bull runs of 2017, 2021, and the 2024‑25 rally. The chart he shared marks prior sub‑1.0 troughs that later preceded 300%‑plus price gains. However, he also warns that this cycle differs because Bitcoin never fully surged into the classic “overvalued” territory during its last uptrend, meaning the descent may not mirror past patterns exactly.

Mayer Multiple and 200‑Week MA: Historic Bottom Indicators for Bitcoin

Will Clemente, another respected analyst, highlighted two complementary price‑based metrics: the Mayer Multiple and the 200‑week moving average (MA). The Mayer Multiple is calculated as the current price divided by the 200‑day MA. A value around 0.60 has historically signaled deep accumulation phases. Bitcoin’s Mayer Multiple now hovers at 0.60, aligning with past bottoms that sparked multi‑year bull markets.

The 200‑week MA, a long‑term trend line, currently sits near $57,900. Bitcoin is trading roughly 15% above that line—still within “long‑term accumulation territory” but not yet touching the safety net that the 200‑week MA provides. Historically, when BTC stays above this line for an extended period, the probability of a sustained upward move increases dramatically.

Sector‑Wide Implications: How the Crypto Market Reacts to Valuation Signals

Bitcoin’s valuation metrics often act as a leading indicator for the broader crypto ecosystem. When BTC shows signs of undervaluation, altcoins typically follow suit, benefitting from spill‑over capital as investors diversify into higher‑risk tokens.

Recent inflows into Ethereum, Solana, and Layer‑2 solutions have already risen 12%‑18% month‑over‑month, suggesting that market participants are positioning for a broader rally. Conversely, if Bitcoin fails to break higher, the sector could see a re‑allocation back to cash or traditional safe‑haven assets like gold, especially given the lingering macro‑uncertainty from central bank tightening cycles.

Historical Parallels: Past MVRV Dips and What Followed

Looking back, three notable MVRV troughs stand out:

• Late 2015 – Early 2016: MVRV fell to 0.86, Bitcoin was $430. Within four months, the price exploded to $1,200, delivering a 180% gain.
• Mid‑2018: Ratio slid to 0.78, price at $6,500. By December 2019, Bitcoin rallied past $7,200, and the 2020‑21 bull run later surged it above $60k.
• Early 2023: MVRV touched 0.95, price at $22,000. A six‑month rally pushed BTC beyond $40k, setting the stage for the 2024‑25 ascent.

Each time, the MVRV dip preceded a multi‑month appreciation, with the magnitude of the rally roughly proportional to how deep the undervaluation was. While past performance does not guarantee future results, the pattern provides a probabilistic edge for disciplined investors.

Investor Playbook: Bull vs. Bear Scenarios for Bitcoin

Bull Case (30‑60% upside in 3‑6 months):

• MVRV breaches the 1.00 threshold and slides toward 0.95, confirming undervaluation.
• Bitcoin sustains a close above the 200‑week MA for at least four consecutive weeks, signaling technical strength.
• Institutional on‑chain activity (e.g., inflows to custodial wallets) rises, indicating accumulation by large players.
• Regulatory clarity emerges in key markets (US, EU), reducing risk premia.

Actionable move: Allocate 5‑10% of a diversified crypto allocation at current levels; add another tranche on a dip below $65k or if MVRV falls under 1.00.

Bear Case (15‑25% downside over 2‑4 months):

• MVRV stabilizes above 1.20, suggesting overvaluation.
• Price repeatedly tests and fails to hold above the 200‑week MA, indicating weakness.
• Macro‑risk spikes (e.g., unexpected rate hikes, geopolitical shocks) trigger risk‑off flows.
• Regulatory setbacks (e.g., stricter exchange rules) erode market confidence.

Actionable move: Trim exposure to 2‑3% of the portfolio; consider protective options or stablecoin positioning to preserve capital.

Putting It All Together: How to Position Now

Given the convergence of three historically bullish signals—MVRV at 1.10, Mayer Multiple at 0.60, and price comfortably above the 200‑week MA—Bitcoin appears to be at a strategic inflection point. The prudent approach is to treat the current environment as a “window of opportunity” rather than a guaranteed rally. By layering exposure, monitoring the key metrics daily, and staying alert to macro headlines, investors can capture upside while limiting downside.

In the world of crypto, timing is notoriously tough, but valuation metrics provide a disciplined framework. If you respect the numbers, you respect the risk‑reward equation. The question now is not whether Bitcoin will move—but whether you will be positioned to profit when it does.