Last updated on November 22
The Kaspa MVRV Z-Score measures how overvalued or undervalued KAS might be with respect to its realized value or "fair value."
To learn more about Kaspa’s realized value, see our Kaspa Realized Price Chart.
The score is calculated by comparing the current market valuation to its realized valuation and the standard deviation of the market cap with the following formula:
(Market Cap – Realized Cap) / STD(Market Cap)
Why is it Important?
When the market value significantly exceeds the realized value (i.e., a high MVRV Z-Score), this signals a potential market top, indicating that KAS is overvalued. Conversely, when the market value is significantly lower than the realized value (a low MVRV Z-Score), it may signal a market bottom, indicating that Kaspa is undervalued.
How to Read the Chart:
The three key signals of the MVRZ-Z are the following:
The Market Value of KAS (The Grey Line): The current price of KAS multiplied by the number of coins in circulation. This is also known as the market cap in traditional and crypto markets.
The Realized Value (The Green Line): The price of each KAS when it was last moved. The individual prices are added up and averaged out. The average price is then multiplied by the total number of circulated coins.
This calculation provides a more accurate long-term depiction of the market value by stripping away the short-term market sentiment.
The Z-Score (The Orange Line): This is the standard deviation test pulling out the extremes in data between the market value and realized value.
Want to Learn More?
Murad Mahmudov and David Puell developed the MVRV Z-Score, which has historically been used as a Bitcoin metric to measure BTC's market value against its realized value. However, the metric can also be applied to Kaspa.
The following charts provide a similar approach to valuing data: Puell Multiple, RHODL Ratio and Reserve Risk.