Meyer Index vs MVRV Z-Score: How reliable are the two major BTC topping indicators?

This article reviews the historical performance of the Mayer Multiple and MVRV Z-Score, two commonly used indicators, and combines current data to analyze market sentiment to explore whether Bitcoin has reached the peak of this bull run. This article is based on a piece authored by 0xYYcn (Bitfox Research), organized, compiled, and written by 深潮TechFlow. (Background: Wall Street genius! Tom Lee accurately predicted Ethereum's “bottom” three times, forecasting ETH to break $10,000 this year and BTC to reach $150,000.) (Additional Context: The largest holder of Ethereum, BitMine (BMNR), has unrealized losses of $190 million, and Tom Lee confidently states: ETH is looking at $15,000.) Bitcoin broke its historical high on August 13, and Ethereum (ETH) subsequently approached $5,000, while Solana recently surpassed the key resistance level of $215. However, since then, the market has shown a continuous pullback trend. This raises an important question: Will BTC, ETH, and SOL continue to see a new round of increases? When will the peak of this cycle arrive? Two widely watched indicators used to measure whether Bitcoin is overvalued or has entered a bubble zone are the Mayer Multiple (MM) and MVRV Z-Score. Both indicators have a good historical record in technical and on-chain analysis and are often used to identify market overheating conditions before significant pullbacks. This article reviews the historical performance of these two indicators and provides market insights based on current readings. Core Indicators Mayer Multiple (MM): The Mayer Multiple is the ratio of Bitcoin's current price to its 200-day moving average price. ● MM > 1 → bullish (price above long-term trend) MM < 1 → bearish (price below long-term trend) ● MM >> 2 → entering speculative bubble zone In this analysis, 2.2 is set as the warning line for overheating. MVRV Z-Score (Z): The MVRV Z-Score compares Bitcoin's market capitalization to its realized value (the total cost basis of all circulating coins) and standardizes it through the market's historical volatility. ● High Z → market cap far exceeds realized value, investors generally hold a lot of unrealized profits (common at cycle tops). ● Low or negative Z → market trading price is below the overall cost basis (common in undervalued or capitulation phases). In this analysis, 5 is set as the warning line for overheating. Backtesting Methodology We applied these two indicators to 11 recognized periods of significant Bitcoin pullbacks. For each period, we defined a “pullback window” covering the month prior to the event and the event month. Using daily data, the rules are as follows: ● When MM > 2.2 or MVRV Z-Score > 5, that day is considered a signal. ● If at least one signal occurs within a major pullback window, it is considered that the pullback has been captured. Subsequently, we calculated the hit rate (number of pullbacks captured ÷ total number of pullbacks) and analyzed the sensitivity (the frequency of signals appearing in non-pullback windows). Bitcoin prices and major pullback windows as of August 18, 2025 (data source: Bitfox Research) Mayer Multiple: Identifying Overheated Markets The Mayer Multiple reflects the level of price relative to long-term averages. Historically, when the ratio significantly exceeds 2, it often indicates that Bitcoin is trading at a significant premium, usually driven by speculation. The logarithmic price of Bitcoin against the Mayer Multiple and its 2.2 threshold (as of August 18, 2025, data source: Bitfox Research) ● Performance: At the 2.2 threshold, MM captured 9 out of 11 significant pullbacks (hit rate of 82%). ● Accuracy: Successfully identified classic cycle tops (2011, twice in 2013, 2017, twice in 2021, and the tops in early 2024 and 2025). ● Misses: July 2019 (mid-cycle pullback) and March 2020 (pandemic-induced liquidity shock). Mayer Multiple: Historical Performance in Identifying Market Tops (2011–2025) Advantages: Very robust for identifying overheated markets. Disadvantages: Often triggers too early—if investors exit at the first >2.2 occurrence, they would miss most of the bull runs in 2013 and 2017. MM is better suited as a bubble warning system rather than an accurate exit signal. MVRV Z-Score: Measuring Market Bubbles with On-Chain Data The MVRV Z-Score measures investors' unrealized profits, and when the value is extremely high, it often indicates speculative overheating in the market. The logarithmic price of Bitcoin against the MVRV Z-Score and its 5 threshold (as of August 18, 2025, data source: Bitfox Research) ● Performance: At the 5 threshold, the Z-Score captured about 45% of significant pullback windows. ● Advantages: Much more precise than MM. Once triggered, it typically appears only one month before the top, providing timely signals for investors. ● Disadvantages: Missed many pullbacks, especially those driven by external shocks (such as the pandemic in March 2020) or mid-cycle adjustments (such as July 2019). MVRV Z-Score: Historical Performance in Identifying Market Tops (2011–2025) Conclusion: Although not as comprehensive as MM, when the Z-Score issues signals, its effect is sharper. It is less prone to false alarms but must be used in conjunction with other indicators. Backtesting Conclusion: An Evolving Market The backtesting results indicate that both the Mayer Multiple and MVRV Z-Score show a downward trend in peak levels when marking market tops. Historically, the Mayer Multiple has declined from readings above 17.5 in early cycles to around 2.2 in recent years; the MVRV Z-Score has dropped from peaks above 8 to near 3. This indicates that the market dynamics of Bitcoin are evolving, and the indicator levels at which peaks occur are getting lower. Comparison of Bitcoin Prices with Google Bitcoin Trends Index An additional perspective comes from comparing Bitcoin prices with the Google Trends index (provided by @0xPianoHands). The trend of Bitcoin prices has gradually decoupled from search trends, while search volume is often an indicator of retail investor participation. With the influx of institutional capital, Bitcoin is gradually transitioning to a more stable, efficient, and mature market. Therefore, the traditional thresholds used for the Mayer Multiple and MVRV Z-Score may need to be adjusted downward to reflect this change in market structure. Investor Insights For investors, these indicators should be seen as warning signals rather than absolute sell triggers. The Mayer Multiple provides broader coverage and often identifies overheating conditions in advance, while the MVRV Z-Score is more discerning, usually only signaling when the top is near. A prudent approach is to treat threshold breaches as warnings but seek confirmation of trend reversals before taking action. When both indicators heat up simultaneously, the credibility of the signals is higher; if relying on a single indicator's trigger, one should wait for clearer signs of market reversal.