What is STH MVRV?

The Short-Term Holder Market Value to Realized Value (STH MVRV) is a valuable tool for analyzing Bitcoin market dynamics, particularly when looking at the behavior of short-term holders—those who have held Bitcoin for less than 155 days.

This metric can help users gain insights into how these holders are responding to market movements.

The formula is straightforward:

STH MVRV = Market Value of Short-Term Holders / Realized Value of Short-Term Holders

In simple terms, this metric compares the current market value of Bitcoin held by short-term holders to the price they paid for it.

When the ratio is above 1, short-term holders are generally in profit. Conversely, if the ratio is below 1, these holders are likely seeing a loss.

Key Interpretations of STH MVRV:

  • High STH MVRV (above 1.5): This could indicate that short-term holders are sitting on significant profits. In such cases, there is often increased selling pressure, as many holders may decide to lock in their gains.

  • Low STH MVRV (below 0.5): This might signal that Bitcoin is undervalued relative to what short-term holders paid for it, which could indicate a potential buying opportunity, though this is not guaranteed.

How is STH-MVRV Used?

  1. Market Timing: A high STH MVRV can point to potential profit-taking, while a low ratio might indicate a buying opportunity.
  2. Trend Analysis: This metric can be combined with other indicators to understand broader market trends.
  3. Sentiment Gauge: It provides insight into the mindset of short-term holders, reflecting their confidence or uncertainty in the market.