System Overview
The Adjusted MVRV Heatmap is a refined version of the traditional MVRV, designed to highlight overbought and oversold conditions in the Bitcoin market. It is calculated by taking the ratio between Market Value and Realized Value, with an additional mathematical adjustment to account for historical and future alpha decay. This enhancement improves its predictive accuracy over time.
Unlike the conventional MVRV, this adjusted version is range-bound between 0 and 1, making it more intuitive and easier to interpret. The clear numerical boundaries allow for straightforward identification of potential market conditions, helping investors assess risk and opportunity more effectively.
How To Use This System
The Adjusted MVRV Ratio provides an intuitive framework for identifying key market conditions:
0 (Green Zone): Indicates an oversold market, suggesting potential buying opportunities.
1 (Red Zone): Signals an overbought market, advising caution and potential profit-taking.
By applying this indicator to Bitcoin’s price movements, users can visually assess the current market phase in comparison to historical trends. This structured approach aids in making well-informed investment decisions by offering a clear, data-driven perspective on Bitcoin's valuation cycles.
Created By
Alpha Extract in March 2025