Short-Term Holder - Market Value to Realized Value (STH - MVRV) is a metric that takes into account UTXOs held for less than 155 days and is used to assess the behavior of short-term investors.
UTXO Unspent Transaction Output refers to the amount left over or unspent after a transfer transaction has taken place and is transferred for use in subsequent transactions.
Unlike the classic MVRV, STH-MVRV analyzes movements over a shorter time frame.
How to Calculate?
The STH-MVRV formula is the market capitalization of Bitcoin held for less than 155 days divided by the realized value.
Critical Levels for STH - MVRV
Looking at the historical data, it can be observed that the STH-MVRV, 1 line works as an important resistance point.
When the STH-MVRV level breaks the value of 1 to the upside, it can be considered the beginning of an uptrend for Bitcoin.
When the STH-MVRV level breaks the value of 1 to the downside, it can be considered the start of a downtrend for Bitcoin.
The lines 0.6, 0.8, 1, 1.2, 1.4, 1.6, 1.8 on the chart can be considered as support and resistance points. You can create your own strategy using these points.
Using STH - MVRV on Traderlands
You can start creating a strategy by selecting the "STH-MVRV" indicator from the list of indicators. An example strategy is shown in the image below. You can use the STH-MVRV indicator in a way that suits you, by creating it in line with your research.
Strategy Example with STH - MVRV Indicator
Settings you can add to the Enter Algorithm
The rule set based on the change of STH - MVRV is as above. A decrease of -3% on the close of the previous candle is required, while at the same time an increase of 0.5% is required on the next candle.
Settings you can add to the Exit Algorithm
As an exit condition, the rule that will close the position if the STH-MVRV value falls by -1.5% after entering the position can be created as above.
You can also set your own values and make additional settings such as Take Profit, Stop Loss and Trailing Stop.
Backtest Results
1-year backtest result for BTC pair (with x10 Leverage)
WARNING: The entry and exit strategies in the images are for educational purposes to explain the indicators. They do not guarantee any profit.
When designing an Algorithmic Trading strategy, multiple indicators are usually linked together to form a set of rules.
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