Case Study 2: NRPL and 3y MVRV to Spot Macro Cycle Bottoms

Metrics

3 year MVRV & Network Realized Profit Loss

Scenario

For this case study I explain how I decided to enter BTC positions in the summer of 2022 with the help of two solid metrics. This metric combination works on a very long time horizon and fires a signal approximately once per macro cycle, and when it does you don’t want to miss it.

It’s worked the last 3 cycles like clockwork, and it’s very simple - you want to buy your long-term spot BTC when you notice 3 year MVRV entering -40-45% zone, combined with large negative spikes of Network Realized Profit Loss.

The justification for this is straightforward. Large holders are selling their BTC at whatever price they can get, due to being overleveraged and pushed into the corner. MVRV shows that an average long-term holder is down at least 40%, and it never really went lower in the entire BTC history. Using this exact data I made a bottom call on BTC in summer 2022, you can see it with your own eyes here, in my post on Santiment Insights.

Decision: Maksim decided the depressed MVRV ratio and spiking NRPL were indications of a good moment to buy BTC, so he entered into a new position in summer of 2022 between $17,000 & $30,000.

Outcome: BTC proceeded to go on a massive bull run.