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Free Float MVRV (Free Float Market Cap / Realized Market Cap)
The ratio of the free float market capitalization (CapMrktFFUSD) to the sum "realized" USD value of the current supply (CapRealUSD).
- It improves upon the Market Value numerator of the MVRV formula (Market Cap/Realized Cap) by proving a more accurate representation of liquidity via CapMrktFFUSD.
Only applicable to assets for which we have Free Float Supply (SplyFF) data available.
- Release Version: NDP-EOD 4.8 (Nov, 2020)
Market value to realized value (MVRV) has historically been one of the most reliable on-chain indicators of bitcoin market tops and bottoms. MVRV is calculated by dividing bitcoin’s market capitalization by its realized capitalization. Realized capitalization can also be thought of as a gross approximation of bitcoin’s aggregate cost basis. In our variant of the MVRV calculation, we use free float market capitalization which is calculated using liquid supply as opposed to total supply.
Historically, a high ratio of market capitalization to realized capitalization has signaled that bitcoin price was near a local maximum, while a low ratio has indicated that price is near a local minimum. The few times that MVRV has dropped below one have historically been some of the best times to buy bitcoin. An increasing MVRV indicates that current sentiment is increasing fast relative to estimated aggregate cost basis, while decreasing MVRV signals the opposite.