Overview Bitcoin reclaimed the $84,000 area in late September and gave part of it straight back to the bond market. CoinDesk reported that the US 10-year Treasury yield hit its highest level since 200Overview Bitcoin reclaimed the $84,000 area in late September and gave part of it straight back to the bond market. CoinDesk reported that the US 10-year Treasury yield hit its highest level since 200
Is Bitcoin Overvalued? MVRV & Realized Price: Complete On-Chain Valuation Guide
Overview
Bitcoin reclaimed the $84,000 area in late September and gave part of it straight back to the bond market. CoinDesk reported that the US 10-year Treasury yield hit its highest level since 2007, sending equities and crypto lower together, with Bitcoin trading at $83,344 at one point. CoinGecko data puts Bitcoin's market capitalization near $1.69 trillion, about 57.3% of the total crypto market.
At that level the valuation question turns sharp. Nearly a year has passed since the October 2025 cycle high, with a drawdown of more than 50% and a recovery in between, and there is no financial ratio that answers whether the current price is cheap, fair or expensive. Equities have earnings multiples, bonds have yields to maturity, and Bitcoin has neither. What the market uses instead is a set of tools built on on-chain cost: MVRV, realized price, NUPL and the cost basis of long-term holders. Those readings currently sit in a position worth unpacking carefully.
Price Back Above Cost, Valuation Back in Question
From Expensive to Cheap and Back to the Middle
bit.com's MVRV analysis traces the full swing. Bitcoin peaked at $126,198 on October 6, 2025, then fell more than 50% to the low $60,000s by mid-2026. On August 8, with Bitcoin near $64,000, MVRV read roughly 1.24 and the Z-Score 0.42 against a realized price near $52,330, meaning the market was trading barely above the aggregate cost basis of all holders. The subsequent rally lifted MVRV to around 1.5 and the Z-Score to roughly 1.0, both still beneath the long-term mean.
That sequence is the case for on-chain valuation in miniature. When price fell from $126,000 to $64,000, no earnings figure could tell an investor which part of the decline was excessive. MVRV in August said something measurable: the market had arrived at the level where the average holder broke even.
The Bond Market Reenters the Pricing Equation
The late-September pullback did not originate on-chain. CoinDesk's live coverage of September 23 recorded the 10-year yield rising 18.5 basis points in a single session to 5.127%, the highest since 2007, with the Nasdaq down 1.15% and the S&P 500 down 0.7%, while October rate-hike expectations jumped from about 50% to 73.1%. The Fed had already lifted the federal funds target range to 3.75% to 4% in its September 16 implementation note, raising the interest rate paid on reserve balances to 3.90%.
For an asset that generates no cash flow, a higher risk-free rate is a higher cost of carry. On-chain metrics cannot see that, which is why any valuation judgment has to carry the macro term alongside it. The Federal Reserve meets next on October 27 and 28.
Why the Price-to-Earnings Question Has No Answer
No Earnings Means No Denominator
A price-to-earnings multiple divides price by some sustainable cash return. Equities have net income, property has rent, bonds have coupons. The Bitcoin protocol produces no profit and distributes nothing to holders, and dividing market capitalization by an activity metric does not create an economically meaningful ratio.
That is often misread as "Bitcoin cannot be valued." The more accurate statement is that Bitcoin cannot be valued by an income approach, but it can be valued on a cost basis and on a relative basis. On-chain valuation is precisely the second and third approaches, rebuilt from blockchain data.
Realized Cap Turns Capital Inflow Into a Number
The starting point is realized capitalization. Every coin is priced at the value it last moved on-chain, and those values are summed. As CryptoQuant defines it, the metric measures the aggregate value of supply priced at last on-chain movement rather than at the prevailing market price.
Divide realized cap by circulating supply and the result is realized price, the average cost basis of the entire network. It answers a question no earnings multiple can: what the market actually paid for the coins in existence. It is not the conclusion of a valuation exercise, it is the baseline.
MVRV Measures Price Against What Holders Paid
Construction and Thresholds
MVRV divides market capitalization by realized capitalization. According to Newhedge's metric documentation, the concept was introduced by on-chain analysts Murad Mahmudov and David Puell in a paper published in October 2018 and has since become a standard tool for reading Bitcoin's long-term cycles. bitbo's data page gives the conventional thresholds: above 3.7 signals overvaluation, below 1 signals undervaluation.
A reading below 1 has a plain meaning. Price sits beneath the aggregate cost basis and the average holder is underwater. That condition has appeared rarely, and each time close to a cycle low.
The Z-Score Puts the Ratio in a Statistical Frame
The raw ratio travels poorly across cycles. The Z-Score divides the gap between market value and realized value by the standard deviation of market value, expressing the result as deviations from the long-run norm. bit.com's analysis notes that conventional bands read a Z-Score above 7 as historical euphoria, the zone where every pre-2022 cycle top printed, and 2 to 4 as extended but not extreme.
The current reading is 0.95, according to MacroMicro, as of September 20. That is a long way from the top band, and it has also left the near-zero territory of midyear. In the plainest terms available, Bitcoin is neither cheap nor expensive right now.
The Thresholds Themselves Are Moving
The real hazard is treating historical bands as fixed constants. bit.com's analysis supplies the key observation: this cycle's MVRV peak was roughly 2.524 by Amberdata's count, printed in January 2025, well short of the 3.5 threshold that preceded both prior major tops. The Z-Score stayed clear of the red zone and NUPL never sustained readings above 0.75. For the first time, a major cycle top arrived without any of the canonical on-chain top indicators firing cleanly.
A plausible explanation is structural. Coins held by ETFs, custodians and corporate balance sheets move on-chain far less often than retail supply, which slows the refresh rate of realized price and compresses the range MVRV travels. The metric still works, but the extremes need recalibration.
The Cost-Basis Ladder Defines the Range
From Realized Price to the Mean MVRV Price
Glassnode's Week 38 report puts the relevant cost lines on one chart. The True Market Mean sits at $77K, capturing the cost basis of actively circulating coins while excluding long-dormant and presumed-lost supply. The densest cluster of long-term holder supply sits at $84K to $85K, just below spot. Above that, $96.7K is the mean MVRV price, calculated as realized price multiplied by Bitcoin's long-term average MVRV, marking where the average holder's profit returns to its long-run norm. Buyers from one to two years ago, near the top of the range, break even close to the same level.
Those numbers are a map rather than a forecast, and Glassnode frames them with restraint. Holding above $84K keeps the path to $96.7K open, while a drop back below $84K brings $77K into view.
The Ladder Moves
Cost lines are not static. Glassnode's August 19 report recorded the deepest configuration of the bear market: the Short-Term Holder Cost Basis had fallen to $68.5K, below the True Market Mean at $75.8K, meaning coins were changing hands beneath what both cohorts had paid. That arrangement is a hallmark of the capitulation phase in which cycle bottoms have historically formed.
By the September 9 report, the picture had changed. Long-term holder cost basis, the liquidation map and the ETF break-even all drew the same resistance band between $83K and $86K, with the ETF break-even at $86K and corporate treasuries breaking even near $80.5K. In three weeks the market moved from below every cost line to sitting among them.
The Slowest Line Matters Most
Long-term holder realized price measures the average acquisition cost of coins held outside exchange reserves for more than 155 days. As CoinGlass describes it, it is calculated as the realized value of long-term holder supply divided by the coins held, and it reflects conviction and potential support. Because it moves slowly, it is the most useful reference for the lower bound of a valuation range.
Most of these metrics are publicly viewable on Glassnode, CryptoQuant and CoinGlass. Traders generally cross-check them against spot turnover and open interest on venues such as MEXC rather than relying on a single data lens.
NUPL and Supply in Profit Show Why This Drawdown Differs
Losses Were Wide but Shallow
NUPL measures the total paper gain or loss across all coins as a share of market value. Glassnode's Week 38 report delivers the most counterintuitive pairing of the cycle: at the June low, Percent Supply in Profit fell to roughly the same level as at the November 2022 low, meaning about as many coins sat at a loss as in the last bear market, yet NUPL never turned negative, while in 2018 and 2022 it fell deep into negative territory.
The separation between the breadth and the depth of losses is the point. Selling pressure correlates with how far underwater holders are rather than with how many of them are underwater, which is one structural reason this drawdown produced nothing resembling the 2022 cascade.
Never a Close Below Realized Price
The rarer signal is that Bitcoin never closed a single day below the Realized Price during this bear market. Glassnode notes that in both the 2018 to 2019 and 2022 to 2023 bear markets price traded below that line for months, while this time the June low held above it, something no bear market since 2017 managed. If price holds above the True Market Mean, the June low will stand as the shallowest of the three.
Profit Taking Stays Light
Valuation eventually has to be confirmed by behavior. Glassnode reports that weekly net realized profit and loss during the current run is a fraction of what it was at the 2024 and 2025 tops, closer in scale to the start of the late-2023 uptrend. The share of short-term holder supply in profit has crossed the line above which their selling has historically picked up, yet realized profit across all holders remains low, so the incentive to sell has not become actual selling.
US spot ETFs took in about $1.3 billion in the five days after the current squeeze began, ending two weeks of net outflows, and spot volume across exchanges is up 121% from its August trough. Buying into strength rather than volume expanding on the way down marks a break from the pattern that ran from late 2025 through midyear, when four consecutive turnover spikes all printed on legs lower.
Risks, Blind Spots and What to Watch
Three Structural Blind Spots
The first is custody concentration. Coins held by ETFs, corporate treasuries and custodians rarely move on-chain, which lets realized price lag actual capital flows and systematically compresses MVRV readings. That is a leading candidate explanation for why this cycle's top indicators failed to fire.
The second is lag. Realized price, NUPL and MVRV all update daily and are cycle-level tools. They offer nothing for intraday positioning.
The third is reflexivity. Once enough participants treat $84K or $96.7K as decisive, those levels start working through resting orders and dealer hedging rather than through valuation logic. Glassnode's options data illustrates the mechanism: positive gamma around the $95K strikes on Deribit jumped to its highest reading on the chart while negative gamma built between spot and $92K, meaning hedging flows tend to accelerate moves in the lower band and dampen them in the upper one.
Three Scenarios
In the constructive case, price holds the $84K to $85K long-term holder cluster, ETF inflows persist and profit taking stays at its current pace, making $95K to $97K the first genuine valuation test. Reaching that level would return MVRV to roughly its long-run mean, shifting Bitcoin from cheap to fairly priced with a lean toward expensive.
In the range case, price oscillates between the True Market Mean and the long-term holder cluster, with MVRV parked near 1.5 for an extended stretch. That is the most common state of a neutral valuation zone and the phase in which on-chain metrics carry the least directional information.
In the adverse case, yields keep rising and the Fed hikes again in October, with discount-rate pressure overwhelming the on-chain signal. A break below $84K puts $77K back in play, and a loss of $77K would put the shallowest-bear-low narrative itself under review.
The Variables That Matter
The most direct thing to watch is whether weekly realized profit climbs toward the levels seen at the 2024 and 2025 tops, the point at which holders start selling into strength. Next is whether ETF inflows hold their current pace and how far spot volume recovers, given that the seven-day average remains roughly 30% below where it stood a year ago. On the macro side, the October 27 to 28 FOMC meeting and the employment and inflation data preceding it act directly on the denominator. On-chain, the speed at which the MVRV Z-Score travels from 0.95 toward 2 and above will determine whether the repricing is gradual or abrupt.
Exclusive View from James Mitchell
For James Mitchell, the notable feature of this level is not whether Bitcoin is cheap or expensive but that several independent cost lines have converged into an unusually narrow band. The densest long-term holder cluster sits at $84K to $85K, Glassnode puts the ETF break-even at $86K, corporate treasuries break even near $80.5K, and price is oscillating right through the middle of that set. What is being contested in this range, in effect, is whether the largest institutional holders return to profit for the first time this year. That configuration does not appear often in on-chain data, and it makes the fight between $80K and $86K more informative than any chart pattern drawn over the same bars.
The likeliest misreading is treating historical thresholds as a fixed yardstick. This cycle's MVRV peak was roughly 2.524 against a 3.5 benchmark, the Z-Score never entered the red band, and NUPL never sustained readings above 0.75. Anyone still waiting for a Z-Score of 7 before reducing exposure may wait through an entire cycle without seeing it. The inverse misreading deserves equal caution: NUPL never turning negative does not mean downside risk has been retired, only that paper losses were shallower than in any prior bear market, and shallow losses can be read either as resilience or as an incomplete flush. The data does not currently separate those two interpretations, and saying so is the honest position.
What investors should watch next is behavior rather than the valuation ratio itself. The share of short-term holders in profit has crossed the line where selling historically picks up while realized profit remains low, and that combination is unstable. It resolves either into sustained profit taking as price advances or back below the line as price retreats. Which happens first carries more information than MVRV drifting from 0.95 to 1.2. Meanwhile, anchoring position size to cost lines is a workable risk framework, using the True Market Mean at $77K as a reference for valuation support rather than picking a round number as a psychological anchor.
The cross-asset lesson is that Bitcoin's valuation has become a two-denominator problem. On-chain cost lines set the internal reading of cheap and expensive, while Treasury yields set the external opportunity cost. September 23 demonstrated the framework: on-chain signals were improving, the 10-year yield hit its highest level since 2007, and price fell anyway. That behavior closely resembles how long-duration growth equities price in traditional markets, except that Bitcoin's duration comes from a cash-flow structure that is entirely terminal value. For allocators working across assets, holding Bitcoin in both the on-chain cost frame and the real-rate frame gets closer to how it is actually being priced than either frame alone.
FAQ
Is Bitcoin overvalued right now?
Not by the traditional on-chain standards. An MVRV ratio above 3.7 is read as overvalued and below 1 as undervalued, and MacroMicro shows the MVRV Z-Score at 0.95 as of September 20, far from the readings above 7 that have accompanied past cycle tops. The more precise description is that Bitcoin has left the genuinely cheap zone it occupied near the aggregate cost basis in midyear and now sits in neutral territory, neither bargain nor stretched.
Why can't a price-to-earnings ratio value Bitcoin?
Because there is no denominator. A multiple requires a sustainable cash return, and the Bitcoin protocol generates no profit and distributes nothing to holders, so dividing market cap by any activity metric produces a number without economic meaning. On-chain valuation routes around the problem by using what the market actually paid as the baseline and measuring how far price has deviated from it.
What is the difference between MVRV and the MVRV Z-Score?
MVRV is the raw ratio of market capitalization to realized capitalization, intuitive to read but weak for comparison across cycles. The Z-Score normalizes that gap by the standard deviation of market value, expressing it as deviations from the long-run norm. In practice the ratio measures how far price has strayed from cost, and the Z-Score measures how unusual that distance is by historical standards.
Which matters more, realized price or long-term holder cost basis?
They serve different purposes. Realized price is the cost basis of the entire network and marks the firmest lower bound of a valuation range, with historical breaks beneath it proving brief. Long-term holder realized price covers only coins held outside exchange reserves for more than 155 days, moves more slowly, and better reflects where high-conviction capital sits. The first matters more for identifying cycle lows, the second for mapping resistance.
What does it mean that NUPL never turned negative?
It means aggregate paper losses across the network never exceeded aggregate paper gains during this bear market. Glassnode notes that NUPL fell deep into negative territory in both 2018 and 2022, whereas this time the share of supply at a loss at the June low approached November 2022 levels while the magnitude of those losses stayed far smaller. Many holders were underwater, but not deeply, which usually translates into less pressure to sell.
Can these on-chain metrics stop working?
They can drift. Coins held by ETFs, custodians and corporate treasuries move on-chain infrequently, which causes realized price to lag real capital flows and compresses the range MVRV travels. This cycle's MVRV peak of roughly 2.524 fell well short of the 3.5 threshold that preceded both prior major tops, and the Z-Score never reached the red band, which argues for recalibrating the conventional levels rather than applying them unchanged.
Why do Treasury yields affect Bitcoin's valuation?
Because they set the opportunity cost of holding an asset that produces no cash flow. On September 23 the 10-year yield reached 5.127%, its highest since 2007, and Bitcoin, the Nasdaq and the S&P 500 all fell together. On-chain metrics measure whether Bitcoin is cheap relative to its own history, while the risk-free rate measures how attractive it is relative to everything else, and both belong in the same judgment.
What data should be tracked from here?
Weekly net realized profit and loss is the most direct behavioral read, and a climb toward 2024 and 2025 top levels would show holders selling into strength. Whether ETF inflows hold their pace, how far spot volume recovers, and whether price defends the $84K long-term holder cluster together determine whether the $95K to $97K valuation test arrives. On the macro side, the October 27 to 28 FOMC meeting is the key date.
Disclaimer
The information above is provided for general market information and analysis only and does not constitute investment advice, financial advice, legal advice, tax advice or a recommendation to trade. Prices of crypto assets, equities and other related financial assets can fluctuate sharply, and past performance, technical indicators and on-chain data do not guarantee future results. The prices, metric readings and market data cited here are observations at a specific point in time and will change, so the latest figures published by the relevant data platforms and institutions should be treated as authoritative. Readers should conduct their own research and make decisions based on their own financial circumstances, investment objectives and risk tolerance, consulting a qualified professional where appropriate. The MEXC Crypto Pulse team accepts no liability for any direct or indirect loss arising from the use of this information.
About the Author
James Mitchell specializes in technical analysis, market trends, and trading strategies for both Bitcoin and altcoins. Based in London, he has over 10 years of experience in financial markets. Before joining MEXC Learn, James worked as a senior analyst at a leading European investment firm, where he developed expertise in risk management and quantitative trading. His transition to cryptocurrency markets began in 2017, and he has since become recognized for his data-driven approach. He holds a Master's degree in Financial Economics from the London School of Economics. His analytical approach combines traditional technical analysis with on-chain metrics to provide readers with actionable insights.
Areas of Expertise: Technical Analysis, Market Trends & Cycles, Trading Strategies, Bitcoin & Altcoin Analysis, Risk Management.
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