Altcoins Are Currently Underbought According To MVRV
As per data from the on-chain analytics firm , altcoins are currently in the opportunity zone. The relevant indicator here is the “Market Value to Realized Value” (MVRV) ratio, which measures the ratio between the market cap of any cryptocurrency and its realized cap.
The “realized cap” here is a capitalization model for an asset that aims to provide a “true” value for it. The model works by putting the value of each coin in circulation as the price at which it was last transferred on the chain.
On the other hand, values of the metric above this threshold imply the price of the coin (the market cap) may be overinflated when compared to its actual value (the realized cap). This could be a sign that the asset may be due for a correction.
Looks like most of the assets are currently inside the green zone | Source:As you can see in the above graph, the opportunity zone occurs above 1, while the danger zone is below -1. This is flipped from how the MVRV usually works, and this reversal was intentional when Santiment defined the divergence. From the chart, it’s visible that most of the altcoins currently have their MVRV divergence inside the opportunity zone for various timeframes (like 1-day, 7-day, 30-day, and more). Historically, when the MVRV of any asset has shown this pattern, the price has become more likely to rise as during this condition, the coin can be thought to be underbought. The reason behind the altcoins becoming underpriced right now is that their prices have taken quite the beating since this month of March kicked off. “Prices can of course still fall further,” notes Santiment. “But this is the most crypto assets have been in opportunity zones since early January.”
BTC Price
At the time of writing, Bitcoin is trading around $21,700, down 7% in the last week.BTC has declined over the past day | Source: