ReportWire

Tag: MVRV Ratio

  • Ethereum Stays Steady Above Realized Value – Can Fresh Liquidity Fuel The Next Breakout?

    [ad_1]

    Ethereum (ETH), the second-largest cryptocurrency by market cap, continues to trade slightly below the psychologically important $4,000 price level, following the brutal drawdown on October 9, which saw the digital currency test the support at around $3,435.

    Ethereum Stays Above Realized Price – Bullish Momentum Soon?

    According to a CryptoQuant Quicktake post by contributor TeddyVision, Ethereum is trading above its Realized Price at approximately $2,300. Dubbing the price level a “fundamental support zone,” the analyst said that historically, any dips below this level have marked a capitulation phase.

    Related Reading

    For the uninitiated, Realized Price represents the average cost basis of all ETH holders, calculated by dividing the total value of all ETH at the time they last moved on-chain by the current circulating supply. 

    Realized Price effectively shows the “true” average price investors paid, serving as a key indicator of whether the market is in profit or loss. As long as ETH trades above Realized Price, the market structure is likely to remain bullish.

    The analyst also highlighted Ethereum’s Market Value to Realized Value (MVRV) ratio. Notably, ETH holders are currently, on average, at 67% profit relative to their cost basis. This metric gives two major hints about the current market.

    Source: CryptoQuant

    First, it shows that although the market is profitable, it is still far from “overheated” levels. Second, it indicates that market participants are confident about the market’s upward momentum, but not quite euphoric.

    To explain, the MVRV ratio compares the market value of an asset to its realized value. A higher MVRV indicates holders are sitting on larger unrealized profits – often signaling potential overvaluation – while a lower MVRV suggests undervaluation or market fear.

    Further, TeddyVision noted Ethereum’s reaction from the Upper Realized Price Band, which is currently located around $5,300. The analyst remarked:

    Price pulled back before reaching the “Overheating Zone. This isn’t a reversal – it’s a consolidation phase after distribution, a healthy cooldown without structural damage.

    Finally, spot inflows of ETH to crypto exchanges are also slowing down, hinting that the next leg up for the digital asset will likely depend on fresh liquidity, and not leverage. To sum it up, Ethereum is slowly moving from the distribution phase to the consolidation phase.

    Is It A Good Time To Buy ETH?

    While providing reliable future predictions in the crypto market remains a challenging task, fresh on-chain and exchange data point toward ETH regaining its bullish momentum. For instance, Binance funding rates recently hinted that ETH could surge to $6,800.

    Related Reading

    Similarly, ETH reserves on exchanges continue to fall at a rapid pace. Earlier this month, ETH supply on exchanges hit a multi-year low, increasing the probability of a potential “supply crunch” that can dramatically increase ETH’s price.

    That said, crypto analyst Nik Patel recently cautioned that ETH’s price correction may not yet be fully over. At press time, ETH trades at $3,849, up 0.3% in the past 24 hours. 

    ethereum
    Ethereum trades at $3,849 on the daily chart | Source: ETHUSDT on TradingView.com

    Featured image from Unsplash, charts from CryptoQuant and TradingView.com

    [ad_2]

    Ash Tiwari

    Source link

  • Santiment Reveals Best Altcoins Currently In “Opportunity Zone”

    Santiment Reveals Best Altcoins Currently In “Opportunity Zone”

    [ad_1]

    The on-chain analytics firm Santiment has revealed the altcoins that have recently surged into the mid-term “opportunity zone.”

    These Altcoins May Be More Likely To See Rebounds

    In a new post on X, Santiment has discussed what the various altcoins in the market are looking like from the perspective of the MVRV. The “Market Value To Realized Value” (MVRV) refers to an indicator that keeps track of the ratio between the Bitcoin market cap and the realized cap.

    The realized cap here is a capitalization model for BTC that measures the total sum of capital that the investors have used to purchase their coins. As such, the MVRV tells us about how the value that the investors are holding right now (the market cap) compares against this initial investment.

    Historically, the more profits the investors have held (that is, the higher the market cap has been compared to the realized cap), the more likely tops have been to occur. This is naturally because investors become more likely to give in to the allure of profit-taking the higher their gains get.

    On the other hand, cryptocurrencies have been probable to see rebounds when holders’ returns have dropped into the negative territory. In these conditions, there aren’t many profit-takers left, so selling pressure begins to run out.

    Based on these facts, Santiment has come up with an “Opportunity & Danger Zone Model” that uses the MVRV’s divergence from the norm on various timeframes to determine if an asset is providing a potential window for selling or buying right now.

    Below is the chart shared by the on-chain analytics firm that reveals what this model is saying for altcoins around the sector:

    Looks like some of the coins are approaching the opportunity zone | Source: Santiment on X

    From the graph, it’s visible that a lot of coins are still inside the overbought territory, but several altcoins have managed to sneak into the mid-term opportunity zone following the recent market downturn led by Bitcoin’s plunge.

    “This zone gets breached when an asset’s 30-day, 90-day, and 365-day average wallet returns are combining to be in negative territory,” explains Santiment. It should be noted, though, that while mid-term returns are red for these coins, they are still not yet inside the buy zone proper.

    “In a zero sum game like crypto, projects with minimal returns compared to the rest of the sector have a higher probability of a more efficient rebound for those who are willing to #buythedip on projects traders are in the most pain on,” notes the analytics firm.

    According to Santiment, some of the best altcoin candidates who are inside the mid-term opportunity zone include Lido DAO (LDO), Synthetix (SNX), Storj (STORJ), and OMG Network (OMG).

    LDO Price

    Lido DAO has had a bad time recently as its price has gone down more than 31% over the past week. With these red returns, it’s no wonder that the coin is becoming underbought on the MVRV.

    Lido DAO Altcoin Price Chart

    The price of the altcoin appears to have plunged down in the last few days | Source: LDOUSD on TradingView

    Featured image from Shutterstock.com, Santiment.net, chart from TradingView.com

    Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

    [ad_2]

    Keshav Verma

    Source link