On-Chain Analytics Guide & Analytics
Five proven on-chain valuation and behaviour metrics that have historically identified Bitcoin market cycle tops and bottoms. These are the metrics institutional analysts track when price action alone is insufficient.
MVRV Z-Score
Overview
Market Value to Realised Value Z-Score. Compares BTC market cap to realised cap (what all coins last moved at) and normalises to a Z-score. Green zone (Z < 0) = historically undervalued. Red zone (Z > 7) = historically overvalued (prior cycle tops: 2013=8.4, 2017=9.5, 2021=8.0).
How to Read
The Z-score is more reliable than price alone because it accounts for what holders actually paid. Below 0 = unrealised losses widespread, an accumulation opportunity. Above 6 = significant unrealised profit and distribution risk.
SOPR (Spent Output Profit Ratio)
Overview
Measures whether coins being spent are moving at a profit or a loss. SOPR > 1 = coins spent at profit (sellers happy to sell). SOPR < 1 = coins spent at a loss (forced selling or capitulation).
How to Read
In bull markets, SOPR > 1 consistently. A brief dip below 1 followed by a bounce = healthy bull market correction, buyable. SOPR persistently below 1 = bear market capitulation in progress.
Puell Multiple
Overview
Daily miner issuance (in USD) divided by the 365-day moving average of daily issuance. Green zone (<0.5) = miners under-earning vs history, cheap BTC relative to miner income. Red zone (>4) = miners over-earning, historically a sell zone.
How to Read
When miners earn significantly less than their historical average, they are under less pressure to sell. When they earn much more, they have incentive to sell large quantities.
NVT Ratio (Network Value to Transactions)
Overview
Bitcoin's P/E equivalent. Market cap divided by daily on-chain transaction volume. High NVT = price is high relative to actual network activity (overvalued). Low NVT = price is low relative to network usage (undervalued).
How to Read
NVT Signal (90-day smoothed) is more reliable than raw NVT. Rising NVT while price stagnates = on-chain usage falling, bearish. Falling NVT while price rises = strong organic adoption, sustainable rally.
Realised Price Overlay
Overview
Overlays the Realised Price (average cost basis of all BTC in existence) on the BTC price chart. When spot price is below Realised Price, the average holder is at a loss — historically a reliable capitulation zone.
How to Read
Price crossing above Realised Price from below = bull market re-entry signal (occurred early 2019, Jan 2023). Price falling below Realised Price = entering loss territory for average holders; panic selling risk rises.
