Short Term Holder MVRV

Short Term Holder MVRV is used to track the ratio of Market Value to Realized Value of BTC held for less than 155 days.

Market value = current price of BTC × circulation; Realized value = Realized price of BTC × circulation, realized value can be understood as the total cost of holding BTC.

1) When this indicator value is less than 1, it means that the market value of the BTC held by the short-term holders is less than the realized value (holding cost), and the short-term holders hold the BTC at an average loss. The smaller the indicator value, the greater the loss.

2) When the indicator value is greater than 1, it means that the market value of BTC held by short-term holders is greater than the realized value (holding cost), and short-term holders hold BTC in an average state of profit. The larger the indicator value, the greater the profit.

3) The indicator value = 1 is the cost line for short-term entrants, so it is usually an important support or resistance line for price.

1）When the indicator changes from less than 1 for a long time to greater than 1 for a long time, BTC begins to enter a bull market;

2）when the indicator changes from a long term greater than 1 to a long term less than 1, BTC begins to enter a bear market.

The reason for the above phenomenon is that in the stage of fund game on the market, the average trading result of short-term holders is usually a loss. When this group starts to make steady profits, it means that the continuous incremental capital in the market is driving the price up, and the market enters a bull market; When the short-term holders return to the state of average loss, indicating that the market has returned to the stage of capital game, the market has entered a bear market, and this group continues to lose money due to lack of game experience.

At the same time, when the indicator turns from a low point to an uptrend, historically, it often corresponds to the short-term bottom of the market. This is because after the short-term holder's loss reaches a certain percentage, a round of harvesting from the strong side to the weak side is completed, and the market restarts and cycles for the next round.