A Telling Metric Signals Bitcoin Could Keep Climbing

Bitcoin Hits New High Above $112K — But On-Chain Data Points to More Room to Run

Bitcoin (BTC) has reached a fresh all-time high above $112,000, driven by surging institutional demand and growing corporate adoption. Yet, despite the record-setting rally, key on-chain indicators suggest the market may not be overheating—at least not yet.

A widely followed metric, the MVRV Z-Score, shows bitcoin is still trading below levels historically associated with market tops. This suggests that, while BTC is expensive compared to previous months, its valuation remains modest when viewed through a long-term lens.

What the MVRV Z-Score Tells Us

The MVRV Z-Score measures the gap between bitcoin’s market value (current price × circulating supply) and its realized value (based on the average price at which each bitcoin last moved on-chain). The metric is normalized using the standard deviation of market value over time, allowing analysts to evaluate how far current prices have deviated from historical norms.

Here’s the formula: MVRV Z-Score=Market Cap−Realized CapStandard Deviation of Market Cap\text{MVRV Z-Score} = \frac{\text{Market Cap} – \text{Realized Cap}}{\text{Standard Deviation of Market Cap}}MVRV Z-Score=Standard Deviation of Market CapMarket Cap−Realized Cap​

When the score is high—typically above 7—it signals that bitcoin may be entering overheated territory. Low or negative readings, often below 0, have historically coincided with cycle bottoms.

Why BTC May Still Have Room to Rally

As of now, the MVRV Z-Score is at 2.4, far below the peaks seen during past bull markets. For comparison:

• In 2017 and 2021, the metric exceeded 7 before sharp market corrections followed.
• In contrast, cycle lows in 2015, 2019, and 2022 saw readings below 0, indicating heavy undervaluation.

With bitcoin sitting at record prices but its MVRV Z-Score still relatively muted, analysts argue this rally may be more sustainable than previous cycles. It also suggests that the market has not yet entered euphoric territory—offering room for further upside, especially if favorable macro and ETF flows continue.