According to BlockBeats, the article explores essential on-chain metrics that provide insights into the Bitcoin market. It introduces the concepts of MVRV, Realized Price, and Realized Cap, which are crucial for understanding market profitability and average costs.
Realized Cap, also known as realized market value, is calculated by multiplying each unit of Bitcoin by its price at the last transfer and summing these values. This metric reflects the total cost spent on acquiring Bitcoin in the market.
Realized Price (RP) is derived by dividing the Realized Cap by the current circulating supply of Bitcoin. It represents the average cost of Bitcoin across the market. When the market price falls below the RP, it is considered a favorable buying opportunity.
MVRV is a ratio that indicates market profitability, calculated by dividing the current market value (MV) by the Realized Cap (RV). It can also be expressed as the market price divided by the Realized Price. An MVRV value of 2 suggests that the market is, on average, 100% profitable.
The article concludes by encouraging readers interested in further learning about on-chain data analysis to follow the series for more insights.