Dogecoin, Cardano “Very Bullish” Based On MVRV: Santiment
19 Juin 2024 - 9:00PM
NEWSBTC
The on-chain analytics firm Santiment has revealed that Dogecoin
and Cardano are two assets that look “very bullish” according to
this metric. Dogecoin & Cardano Currently Have Low 30-Day MVRV
Ratios In a new post on X, Santiment has discussed about how some
of the top assets in the cryptocurrency sector are looking like
right now in terms of the Market Value to Realized Value (MVRV)
Ratio. The MVRV Ratio is a popular on-chain indicator that keeps
track of the ratio between the market cap and realized cap for any
given coin. The market cap here naturally refers to the simple
total valuation of the asset’s supply at the current price. The
realized cap is also a method of calculating the valuation of the
cryptocurrency, but the twist here is that this model doesn’t take
the value of all tokens in circulation the same as the spot price.
Rather, this model assumes that the “real” value of any coin is the
same as the price at which it was last transferred on the
blockchain. Related Reading: Hard To Be “Too Scared Of Bitcoin
Price Action,” Says Analyst. Here’s Why Generally, the last
transaction can be assumed to be the last point at which the coin
changed hands, so the price at its time could be considered to be
its current cost basis. As such, the realized cap basically
calculates the sum of the cost basis of every coin in circulation.
One way to view the model, therefore, is as a measure of the total
amount of capital that the investors have used to purchase the
total Bitcoin supply in circulation. Since the MVRV ratio compares
the market cap, which represents the value that the investors are
holding right now, against this initial investment, its value can
tell us about the profit-loss status of the market as a whole. Now,
here is the chart shared by the analytics firm that reveals the
recent trend in the 30-day MVRV ratio of six top coins: Bitcoin
(BTC), Ethereum (ETH), XRP (XRP), Dogecoin (DOGE), Toncoin (TON),
and Cardano (ADA). The 30-day MVRV Ratio only includes the data for
the investors who bought their coins within the past month. Thus,
its value reflects the profit-loss balance of these new buyers.
From the graph, it’s visible that the indicator is at negative
levels for all of these assets right now, implying that the 30-day
investors would be at a loss. This may not actually be bad, though,
as Santiment notes, “the lower a cryptocurrency’s 30-day MVRV is,
the higher the likelihood we see a short-term bounce.” At present,
Bitcoin, Ethereum, and XRP are seeing small negative values,
suggesting that these assets may be slightly undervalued. The
metric stands at just -0.6% for Toncoin, though, implying that TON
is more or less neutral currently. Related Reading: XRP, Dogecoin,
& Shiba Inu All See Negative Sentiment: Signal To Buy? Dogecoin
and Cardano, on the other hand, stand out with their 30-day MVRV
Ratios of -16.7% and -12.6%, respectively. These values are deep
enough that Santiment has labelled these coins as “very bullish.”
It now remains to be seen how DOGE and ADA develop in the coming
days, given this potential positive signal in the MVRV Ratio. DOGE
Price Dogecoin has been riding on bearish momentum over the last
couple of weeks as its price has now dropped to $0.125. Featured
image from Dall-E, Santiment.net, chart from TradingView.com
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