We find Market Value to Realized Value (MVRV) for a crypto asset by dividing the market value by the realized value. The realized value is all the UTXOs (units) valued at the price they last were moved - added together. The realized value can be viewed as the cost basis of the network, so we can use MVRV as a proxy to estimate the unrealized profit.
MVRV can be used to get a sense of when the price is above or below “fair value”. For example, during the bull market this spring, bitcoin’s MVRV topped out at 3.96. This was the highest level seen since December 2017, when it reached 4.72. Conversely, when the market bottomed out in the middle of July, it briefly touched 1.54. Cryptoquant has set an upper threshold (sell) for bitcoin at 3.7 and a lower threshold at 1 (buy).