Determining whether the current price of Bitcoin is "expensive" or "cheap" cannot be based solely on nominal figures. For instance, a price of $67,078 (approximately IDR 1 billion) might seem expensive compared to last year's prices, yet technically undervalued based on on-chain data. One of the primary instruments used by professional analysts to measure this is the MVRV-Z Score.

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What is the MVRV-Z Score?

The MVRV-Z Score is an on-chain metric used to assess whether Bitcoin is overvalued (too expensive) or undervalued (too cheap) relative to its "fair value." This metric functions by comparing two primary components:

• Market Value (Market Price): The current price prevailing in global exchanges or markets.
• Realized Value (Realized Price): The average price at which Bitcoin was last moved on the blockchain (often considered the average cost basis for all asset holders).

Put simply, the MVRV-Z Score measures how far the current market price deviates from its fair value.

• High Score: Indicates that the market price is significantly higher than the average investor's cost basis, which is typically followed by profit-taking.
• Low Score: Indicates that the market price is approaching or even below the average cost basis, often serving as a signal for accumulation.

Historical Data Analysis (2025 - 2026)

To observe the effectiveness of this indicator, let’s review three distinct market conditions based on historical data:

1. Overvalued Phase (January 2025)

• Bitcoin Price: $102,264
• MVRV-Z Score: 3.06

In January 2025, as Bitcoin broke the $100,000 psychological barrier, the MVRV-Z Score reached 3.06. A score above 3 indicates that the market price has moved far beyond its fair value. Despite highly positive market sentiment, this data provided a warning that the risk of a technical correction was increasing.

2. Bearish Divergence (August 2025)

• Bitcoin Price: $123,311 (All-Time High)
• MVRV-Z Score: 2.53

An interesting phenomenon occurred in August 2025. While the Bitcoin price hit a new record high of $123,311, the MVRV-Z Score actually decreased to 2.53. This condition is known as a bearish divergence. It suggests that the price increase was not supported by a strong foundation of new capital, making the rally relatively fragile.

3. Undervalued Phase (February 2026)

• Bitcoin Price: $67,078
• MVRV-Z Score: 0.38

By February 2026, the Bitcoin price corrected to $67,078. However, with an MVRV-Z Score of just 0.38 (approaching zero), the data indicated that the price was technically very "cheap." The risk of further downside at this level is typically much lower compared to when the score is above 3.

Read more: Bitcoin vs. Gold: Which is More Suitable for Long-Term Investment?

Conclusion

The MVRV-Z Score provides an objective perspective that goes beyond daily price fluctuations. By understanding the relationship between market price and fair value, investors can make more measured decisions based on current market cycles.

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Disclaimer

This content is provided for informational purposes only and does not constitute investment advice. Always conduct your own research before making any investment decisions. All crypto trading and investment activities are the sole responsibility of the reader.