The more chaotic the market is, the more investors should pay attention to Bitcoin. Even if there are major negative factors, the value of Bitcoin, the main currency of the market, will remain above a certain level, and long-term growth of the cryptocurrency market can be expected if mining continues.
2022 is a ‘historic year’ in many ways in the cryptocurrency market. Investment companies such as 3AC, Voyager Digital, and Celsius went bankrupt in a row as a signal of the “Tera and Luna crisis.” Even before the aftermath disappeared, the world’s third-largest FTX exchange filed for bankruptcy. A series of events in 2022 left fundamental questions about the credibility of the cryptocurrency market.
There were predictions that Crypto Winter would end within this year, but the direction of the market has become somewhat unclear due to the FTX crisis. But for investors, Crypto Winter is the best time to start investing. If you prepare from now on, you are likely to experience a large expansion of wealth when the market enters the highly valued section.
If so, how can we know the right time to purchase cryptocurrency? This can be measured by the ‘MVRV‘ indicator. MVRV is an indicator calculated through ‘on-chain data’. The on-chain data contains transaction details made on the blockchain. It is one of the important data used in the cryptocurrency market as a concept that was not in traditional finance.
MVRV is the value obtained by dividing MV by RV, MV (Market Value) means market value, and RV (Realized Value) means realization value. According to empirical data during the three half-lives, when MVRV is less than 1, it is the buying section (undervaluation section) and when it is more than 3.7 it is the selling section (overvaluation section).
The MVRVZ index is a more elaborately calculated index by applying the standardization concept of statistics to the MVRV index. In the case of the MVRVZ index, if it is less than or equal to 0.1, it is considered as the buying section, and if it is greater than or equal to 6.9, it is considered as