The Bitcoin MVRV Z-Score indicates extreme market pressure

At the end of February, market analyst Axel published a detailed report based on data from CryptoQuant, highlighting a concerning phenomenon: Bitcoin’s MVRV Z-Score currently stands at -2.28, a level that exceeds the historical lows of previous bearish cycles. This data, relayed by BlockBeats, suggests that the markets are experiencing a zone of high pressure.

The MVRV Z-Score, this crucial technical indicator, measures the gap between the actual market value and the on-chain realized value. When the MVRV Z-Score plunges into negative territory, it means that the prices traded in the market are below the fair value estimated by on-chain metrics. By comparing the current level of -2.28 with previous cycles, we observe that the MVRV Z-Score has surpassed the low of -1.6 recorded in 2018 and that of -1.4 in 2022.

How the ETF context transforms MVRV Z-Score sensitivity

The era of exchange-traded funds (ETFs) has fundamentally altered market dynamics. The massive influx of institutional capital has significantly increased the average cost basis for investors. This structural transformation makes the MVRV Z-Score much more sensitive to slight price adjustments. What we observe today thus reflects a new reality: the thresholds of extreme pressure are no longer the same as in the pre-ETF era.

Axel points out that this apparent anomaly of the MVRV Z-Score is precisely explained by this market mutation. The influx of institutional capital has strengthened the cost base, changing the traditional reference points of the indicator.

Technical signals to confirm a trend change

For the market to break free from this critical zone, several conditions must materialize. A rise in the MVRV Z-Score above the threshold of -1.5, accompanied by Bitcoin prices maintaining above $66,000 (the price currently being around $66.20K), would constitute the first technical confirmation signal to exit extreme pressure.

However, the NUPL (Net Unrealized Profit/Loss) indicator, which directly evaluates market sentiment, offers a nuanced perspective. Currently at 0.197, the NUPL remains in the area referred to as “hope,” far from the capitulation territories observed during true cyclical crises.

When the market really panicked: NUPL in negative territory

Authentic capitulation phases, such as those in December 2018, March 2020, and November 2022, are characterized by a plunging NUPL into negative territory. These critical moments indicate that the majority of holders are realizing net losses, signaling a genuine capitulation of the market.

The current level of 0.197 places investors approximately in the middle of the historical range, far from this true pain zone. Although market sentiment has clearly weakened due to bearish pressures, it has not yet reached levels of true panic.

Overall interpretation: between technical pressure and emotional resilience

The converging data from the MVRV Z-Score and NUPL paints a contrasting picture: while technical pressure is intensifying, most participants still maintain a paper profit position (NUPL > 0). Confidence has undoubtedly wavered, but has not given way to total capitulation. The MVRV Z-Score continues to signal technical alerts, while the NUPL reveals a relative emotional resilience of the market. This disjunction between extreme technical signals and moderate market sentiment is one of the remarkable features of the current cycle.