Bitcoin’s MVRV Ratio Signals Further Growth Ahead: The Market Remains Strong and Mid-Cycle

Despite last week’s flash crash that wiped out billions from the crypto market, on-chain metrics for Bitcoin remain remarkably strong.

According to analysts at CryptoQuant, the MVRV ratio (Market Value to Realized Value) suggests that Bitcoin is still in the expansion phase — far from being overheated. This key metric helps investors identify whether the market is in a phase of undervaluation, accumulation, expansion, or euphoria. Right now, the data indicates that Bitcoin sits firmly in the mid-cycle zone, a phase that has historically preceded powerful bull runs.

MVRV at 2.0: Safely Below Overheating Levels Currently, the MVRV ratio hovers around 2.0, well below the historical overvaluation threshold of 4.0, which marked cycle tops in 2013, 2017, and 2021.

In contrast, levels below 1.0 have historically aligned with major accumulation phases, such as in 2015, 2018, and 2020. This mid-range value implies that while most investors are sitting on profits, the market has yet to reach euphoric extremes.

Analysts point out that this supports a “mid-cycle” narrative, where long-term holders (HODLers) are maintaining their positions and refraining from large-scale selling — helping stabilize the market structure.

ETF Inflows and Miner Stability Reinforce Market Health Beyond on-chain data, macro factors also paint a positive picture. Institutional inflows into Bitcoin ETFs remain steady, while selling pressure from miners has eased, reinforcing a healthy balance between supply and demand. Historically, every Bitcoin market cycle unfolds in three phases:

🔹 Recovery (MVRV < 1–2)

🔹 Expansion (MVRV 2–4)

🔹 Euphoria (MVRV > 4) With current levels near 2.0, the market strongly resembles the conditions seen in mid-2020, just before Bitcoin’s explosive rally.

Analysts therefore believe that the market is consolidating, not forming a macro top — a sign of maturity rather than exhaustion.

Exchange Reserves Hit Lowest Level in a Decade Another bullish signal comes from the sharp decline in Bitcoin reserves held on centralized exchanges.

Data shows that total BTC held on exchanges has dropped to 2.4 million, down from over 3.5 million in 2020 — a decline of more than 30%. This longest and most consistent outflow trend in Bitcoin’s history suggests that investors are increasingly moving their coins into cold storage or institutional custody solutions, reducing immediate selling pressure.

Experts interpret this as a sign of growing long-term confidence in Bitcoin’s value.

“Smart Money” Is Accumulating Since 2020, the steady decrease in exchange reserves has consistently preceded major bull cycles — including those in 2020 and 2021.

Current metrics show that “smart money” investors — large institutions and long-term holders — are once again accumulating.

Rising withdrawals, consistent ETF inflows, and moderate MVRV levels together indicate that Bitcoin remains structurally strong and may be gearing up for its next upward phase.

Summary While last week’s crash rattled the market, on-chain indicators reveal that Bitcoin remains in the expansion stage with plenty of room to grow.

An MVRV around 2.0, record-low exchange reserves, and strong institutional demand create conditions that resemble mid-2020 far more than the overheated markets of 2021.

Analysts agree: if these trends persist, the next major bull wave could be just around the corner.

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