Bitcoin's MVRV Ratio and the Imminent Pre-Euphoria Phase Before the Final Parabolic Rally

Bitcoin's market cycle is a dance between on-chain metrics and human psychology. As of September 2025, the MVRV (Market Value to Realized Value) ratio—a critical on-chain metric—suggests Bitcoin is entering a pre-euphoria phase, with conditions primed for a final parabolic rally. This analysis synthesizes on-chain data, sentiment indicators, and historical patterns to argue that the next leg of the bull cycle is not only inevitable but already underway.

The MVRV Ratio: A Window into Market Positioning

The MVRV ratio compares Bitcoin's market value to its realized value (the total cost basis of all coins held by long-term and short-term investors). As of Q3 2025, the ratio stands at 2.1, a level historically associated with neutral to bullish market phasesBitcoin Sentiment-Price Correlation - by Renaud Cuny^[2]. This is far below the overvaluation thresholds of 3.5–4.0 observed at previous market tops in 2017 and 20212025 Bitcoin Outlook: Insights Backed by Metrics and Market Data^[3]. The MVRV Z-Score, a normalized version of the ratio, currently hovers between 2.4 and 3.0, significantly below the 7–8.22 levels seen at prior peaksBitcoin Report – September 2025^[1].

This divergence signals a mature bull market in accumulation mode. Long-term holders (LTHs) have been steadily accumulating during dips, as evidenced by the Z-Score's rebound from a 2025 low of 1.43Bitcoin Report – September 2025^[1]. Unlike the speculative frenzies of 2017 and 2021, this cycle is marked by institutional-grade buying and reduced retail participation, creating a “wall of worry” narrative where prices rise despite muted public interest2025 Bitcoin Outlook: Data-Driven Insights^[4].

Sentiment Indicators: Fear as a Catalyst for Greed

Bitcoin's Fear & Greed Index, a sentiment gauge derived from social media, search trends, and volatility data, has swung wildly in 2025. In April and February, it plummeted to below 10, signaling extreme fear2025 Bitcoin Outlook: Data-Driven Insights^[4]. Yet, these episodes coincided with institutional buying sprees, as systematic investors capitalized on dipsBitcoin Sentiment-Price Correlation - by Renaud Cuny^[2]. Historically, such fear-driven capitulation has preceded parabolic rallies, as seen in 2017 and 20212025 Bitcoin Outlook: Insights Backed by Metrics and Market Data^[3].

The correlation between the Fear & Greed Index and the MVRV ratio has strengthened to 84% in 2025, an unprecedented levelBitcoin Sentiment-Price Correlation - by Renaud Cuny^[2]. This suggests that institutional participation has reshaped market dynamics, with fear now acting as a predictive signal for accumulation rather than capitulation. Meanwhile, Google Trends data reveals a sharp decline in retail interest, with Bitcoin searches in September 2025 hitting multi-year lows2025 Bitcoin Outlook: Data-Driven Insights^[4]. This disconnection between price and sentiment—a hallmark of pre-euphoria phases—indicates that the market is entering a quiet accumulation phase before the next surge.

The Road to Parabolic: On-Chain Signals and Macro Risks

On-chain tools like the Pi Cycle Oscillator and Bitcoin Cycle Master Chart reinforce the bullish case. The Pi Cycle Oscillator shows renewed momentum, with moving averages trending upward and hinting at a breakout phase2025 Bitcoin Outlook: Insights Backed by Metrics and Market Data^[3]. The Cycle Master Chart suggests Bitcoin has room to grow to $190,000 before hitting overvaluation levels2025 Bitcoin Outlook: Insights Backed by Metrics and Market Data^[3].

However, macroeconomic risks persist. A strengthening U.S. Dollar Index (DXY) and geopolitical tensions (e.g., trade war fears) could introduce volatility2025 Bitcoin Outlook: Data-Driven Insights^[4]. Yet, these risks are already priced into the market, with the MVRV Z-Score and Fear & Greed Index suggesting smart money is accumulating rather than fleeingBitcoin Report – September 2025^[1].

Conclusion: Pre-Euphoria and the Final Leg

Bitcoin's MVRV ratio and sentiment indicators paint a clear picture: the market is in a pre-euphoria phase, with on-chain metrics and psychological dynamics aligning for a final parabolic move. While macro risks linger, the combination of institutional buying, muted retail participation, and historically low overvaluation levels suggests the next bull wave is not a question of if, but when.

For investors, the key takeaway is to stay positioned for accumulation. The MVRV ratio's current trajectory and the Fear & Greed Index's inverse correlation indicate that the next leg of the cycle will be driven by smart money, not retail hype. As the Z-Score inches closer to historical overvaluation thresholds, the stage is set for a rally that could eclipse even the 2017 and 2021 peaks.