On-chain analytics firm Santiment revealed that Dogecoin and Cardano are two assets that look “very bullish” according to this metric.
Dogecoin and Cardano currently have low 30-day MVRV rates
In a new publish on X, Santiment discussed where some of the crypto sector’s top assets are doing right now in terms of Relationship between market value and realized value (MVRV).
The MVRV index is a popular indicator on the network that monitors the relationship between market value and realized value for any currency. Market capitalization here naturally refers to the simple total valuation of the asset’s supply at the current price.
O limit realized is also a method of calculating cryptocurrency valuation, but the difference here is that this model does not consider the value of all tokens in circulation to be equal to the spot price. Instead, this model assumes that the “real” value of any currency is equal to the price at which it was last transferred on the blockchain.
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Generally, it can be assumed that the last transaction was the last point at which the currency changed hands, so the price at that time can be considered your current cost basis. As such, the realized cap basically calculates the sum of the cost basis of each coin in circulation.
One way to view the model, therefore, is as a measure of the total amount of capital that investors used to purchase the total supply of Bitcoin in circulation.
Since the MVRV ratio compares the market capitalization, which represents the value that investors currently hold, with this initial investment, its value can tell us about the profit-loss situation 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 the top six coins: Bitcoin (BTC), Ethereum (ETH), XRP (XRP), Dogecoin (DOGE), Toncoin (TON ) and Cardano (ADA).
The 30-day MVRV index only includes data from investors who purchased their coins in the previous month. Thus, its value reflects the balance between profits and losses of these new buyers.
From the chart, it is visible that the indicator is at negative levels for all these assets at this time, which implies that 30-day investors would be at a loss. This may actually not be a bad thing, as Santiment notes, “the lower a cryptocurrency’s 30-day MVRV, the more likely we are to see a near-term recovery.”
Currently, Bitcoin, Ethereum, and XRP are recording small negative values, suggesting that these assets may be slightly undervalued. The metric is just -0.6% for Toncoin, implying that TON is more or less neutral currently.
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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 labels these coins as “very bullish.”
It now remains to be seen how DOGE and ADA will evolve in the coming days, given this potential positive signal in the MVRV Index.
DOGE Price
Dogecoin is advancing bearish momentum in recent weeks as its price fell to $0.125.
Featured image by Dall-E, Santiment.net, chart by TradingView.com