On-chain analytics firm Santiment has revealed the altcoins that have recently emerged in the medium-term “opportunity zone.”
These Altcoins May Be More Likely to See Rebounds
In a new publish on X, Santiment discussed what the various altcoins on the market look like from MVRV’s perspective. O “Market value to realized value”(MVRV) refers to an indicator that tracks the relationship between Bitcoin’s market value and realized value.
O limit realized here is a capitalization model for BTC that measures the total sum of capital that investors used to purchase their coins. As such, MVRV tells us how the value that investors currently hold (the market value) compares to this initial investment.
Historically, the more profits investors hold (i.e., the higher the market capitalization compared to realized capitalization), the greater the likelihood of tops occurring. This occurs naturally because investors become more likely to give in to the allure of profit-taking the higher their earnings become.
On the other hand, cryptocurrencies are likely to post recoveries when holder returns fall into negative territory. Under these conditions, there are not many profit beneficiaries left, so the selling pressure begins to decrease.
Based on these facts, Santiment devised an “Opportunity and Danger Zone Model” that uses MVRV’s divergence from the norm at various time frames to determine whether an asset is providing a potential window for selling or buying at this time.
Below is the chart shared by the on-chain analytics firm that reveals what this model is saying for altcoins across the sector:
Looks like some of the coins are approaching the opportunity zone | Source: Santiment on X
From the chart, it is visible that many coins are still within the overbought territory, but several altcoins have managed to enter the medium-term opportunity zone following the recent market downturn led by The fall of Bitcoin.
“This zone is breached when an asset’s 30-, 90-, and 365-day average portfolio returns combine to be in negative territory,” explains Santiment. It should be noted, however, that although the medium-term returns are red for these coins, they are not yet within 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 recovery for those who are willing to #buythedip on projects where traders suffer the most,” he notes o analytics company.
According to Santiment, some of the best altcoin candidates that are within the medium-term opportunity zone include Lido DAO (LDO), Synthetix (SNX), Storj (STORJ), and OMG Network (OMG).
LDO Price
Lido DAO has had a tough time recently as its price fell by more than 31% last week. With these red returns, it is no wonder the coin is underbought at MVRV.
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
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