MVRV Z Score and MVRV Free Float Z-Score — Strategy by Powerscooter
By Powerscooter
Performance Metrics
- Author: Powerscooter
- Symbol: INDEX:BTCUSD
- Timeframe: 1 day
- Net P&L: +6,077.02 USD (+6,073.06%)
- Win Rate: 100.0%
- Max Drawdown: 69.31 USD (69.31%)
- Total Trades: 3
- Sharpe Ratio: 0.101
Description
IMPORTANT: This script needs as much historic data as possible. Please run it on BTCUSD, BLX or another chart of sufficient length.MVRVThe MVRV (Market Value to Realised Value Ratio) simply divides bitcoins market cap by bitcoins realized market cap. This was previously impossible on Tradingview but has now been made possible thanks to Coinmetrics providing us with the realized market cap data.In the free float version, the free float market cap is used instead of the regular market cap.Z-ScoreThe MVRV Z-score divides the difference between Market cap and realized market cap by the historic standard deviation of the market cap.Historically, this has been insanely accurate at detecting bitcoin tops and bottoms:A Z-Score above 7 means bitcoin is vastly overpriced and at a local top.A Z-Score below 0.1 means bitcoin is underpriced and at a local bottom.In the free float version, the free float market cap is used instead of the regular market cap.The Z-Score, also known as the standard score is hugely popular in a wide range of mathematical and statistical fields and is usually used to measure the number of standard deviations by which the value of a raw score is above or below the mean value of what is being observed or measured.CreditsMVRV Z Score initially created by aweandwonderMVRV initially created by Murad Mahmudov and David Puell