AVAX MVRV Detailed Analysis

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AVAX 1W MVRV and Price Analysis

Hi folks,

Let's take a look at some on-chain data.

What is MVRV (Market Value to Realized Value)?

MVRV is an on-chain indicator used to analyze the valuation of cryptocurrencies. It is a simple but powerful tool that shows investors how overvalued or undervalued a cryptocurrency is at the moment.

Simply 👇🏻

MVRV is below 1: This means that most investors are at a loss and can be interpreted as a potential buying opportunity.

MVRV is above 1: This means that investors are in profit and the price may be overheating.

However, when performing cyclical analysis of each instrument, we can see that different MVRV levels are critical. In instrument X, 1.15 may indicate that the price is overheating, while in instrument Y, 2.00 may indicate that the price is overheating.

Now let's examine AVAX with MVRV Data

In the bull rally we experienced in 2021, AVAX had risen from $5 to $150.

When we examined the MVRV, we witnessed that it had risen from 0.64 to 1.27 points.

When we examine AVAX historically, we can observe that the price overheats when the MVRV score exceeds 1.11 points. However, it should not be forgotten that we are making this examination on weekly data. Therefore, selling everything you have when the MVRV score exceeds 1.11 points will NOT help you maximize your profit in a bull run.

Instead, strategies can be created for gradual selling along with the MVRV score exceeding 1.11 in AVAX. It may be beneficial to do this in 5 or 10 steps. From now on, it is up to you.

Conclusion

In conclusion, by examining the MVRV score of an instrument, we can deduce that investors are at a loss if the price is below 1 (relatively cheap), and relatively profitable if it is above 1.

Historical examinations made specifically for the instrument help us to understand where the price of an instrument heats up based on the MVRV score. In this way, we can create a gradual selling strategy specific to the instrument.

When we look at AVAX, we can see that it offered selling opportunities after 1.11 points in the previous bull run. Following the 1.11 points closely can be beneficial for investors in this bull run.

Thank you for reading.