Ethereum: Mvrv Z-score

History shows that Ethereum moves in distinct cycles. The MVRV Z-Score has an incredible track record of pinpointing the absolute tops and bottoms of these cycles.

During the 2021 bull run, Ethereum was the settlement layer for DeFi and NFTs. ETH velocity increased dramatically. Coins moved frequently for high gas fees, raising the Realized Cap faster than Bitcoin’s. Consequently, Ethereum’s Z-Score tends to be more volatile but often peaks at lower numerical levels than Bitcoin. Ethereum Mvrv Z-score

The Z-Score normalizes the raw difference between Market Cap and Realized Cap by volatility. When the difference is statistically significant (moving 2 or 3 standard deviations away from the mean), it signals an extreme event. History shows that Ethereum moves in distinct cycles

When the Z-Score enters the red zone (>3), the average ETH holder has multiplied their investment. Human psychology is wired to take profits. Even the most ardent “HODLer” begins to feel anxiety. Whales and institutions begin OTC distributions. The risk-reward ratio deteriorates. When the Z-Score enters the red zone (>3),

You don't need to calculate this manually. Several analytics platforms offer live charts:

Historically, when the Ethereum MVRV Z-score rises above 7.0, it signals that the market is in a state of euphoria. At this level, the average holder is sitting on massive unrealized profits.