ETH MVRV Z Score

The ETH MVRV Z Score indicator is designed to help traders and investors analyze Ethereum's Market Value to Realized Value (MVRV) ratio through a standardized Z-score lens. This tool provides insights into potential overbought or oversold conditions in ETH's market by comparing the MVRV ratio to its historical statistical behavior.
The indicator calculates the Z-score of the MVRV ratio over a user-defined lookback period, visually representing how far the current MVRV deviates from its mean in terms of standard deviations. It features customizable overbought and oversold thresholds, a gradient-based color system for easy interpretation, and optional chart coloring to highlight key market conditions. Horizontal lines and filled zones provide additional context for interpreting the Z-score levels, ranging from extreme undervaluation to extreme overvaluation.


Key Features:

• Z-Score Calculation: Measures the deviation of ETH’s MVRV ratio from its historical average, normalized by standard deviation.
  
• Customizable Settings: Adjust the lookback length for the Z-score calculation, as well as overbought and oversold thresholds.
  
• Color Gradient: Visualizes the Z-score with a smooth gradient, transitioning between user-defined colors for oversold, neutral, and overbought states.
  
• Optional Chart Colors: When enabled, applies dynamic coloring to candlesticks and backgrounds based on the Z-score, enhancing visual analysis.
  
• Horizontal Levels: Displays predefined Z-score levels (from -5 to 5) with shaded zones to mark significant thresholds.
  

Inputs:

• Z Length: The lookback period for calculating the Z-score (default: 150).
  
• Overbought Z Score: The threshold above which ETH is considered overbought (default: 2).
  
• Oversold Z Score: The threshold below which ETH is considered oversold (default: -2).
  
• Chart Colors: Toggle to enable/disable dynamic candlestick and background coloring.
  
• Color Options: Customize colors for oversold, overbought, and neutral zones.
  

How to Use:
A Z-score above the overbought threshold (e.g., 2) may suggest ETH is overvalued, potentially signaling a selling opportunity.
A Z-score below the oversold threshold (e.g., -2) may indicate undervaluation, potentially signaling a buying opportunity.
The gradient and optional chart colors help quickly identify market conditions, while the horizontal lines provide reference points for extreme deviations.

Best For:

• Long-term investors assessing ETH’s valuation.
  
• Traders looking for mean-reversion opportunities.
  
• Analysts combining on-chain metrics with technical analysis.