On-chain analytics firm Santiment has revealed the altcoins that are currently in the historic buy zone according to a fair value model.
A large number of Altcoins are currently close to the opportunity zone
In a new publish At X, Santiment talked about how various assets in the cryptocurrency sector are doing at the moment, based on their Market Value/Realized Value (MVRV) Ratios. The MVRV index is an indicator that tracks the profit/loss status of addresses on any network.
When the value of this indicator is above 1, it means that investors are making a net profit at this time. On the other hand, the metric below this threshold implies the dominance of losses in the market.
Naturally, the MVRV ratio being exactly equal to 1 suggests that the unrealized loss in the network is exactly equal to the unrealized profit, so the average holder can be considered just in equilibrium.
Historically, corrections have become more likely when investor profits have increased. Holders are more tempted to sell as their gains increase. Similarly, the fact that holders are underwater has facilitated the formation of bottoms, as sellers become exhausted in such conditions.
Based on these facts, Santiment has developed an opportunity and danger zone model that uses the divergence of the MVRV index over different time frames to better estimate whether an asset is currently providing a buy or sell window.
Now, here is the chart shared by the analytics firm that shows where different altcoins stand according to this model:
Note that in this model the zero mark takes the role of the neutral level 1 of the MVRV ratio. Furthermore, the polarity is reversed here, with values below zero implying profit dominance and those above it signifying loss.
The chart shows that most altcoins are in the positive region at the moment, suggesting that their investors are underwater. Among them, Basic Attention Token (BAT), Chromia (CHR), and Highstreet (HIGH) particularly stand out as their MVRV divergence crosses the 1 mark.
In this model, the region above 1 is called “Opportunity Zone”, as assets have historically offered the most profitable opportunities while within it.
While most altcoins are at least slightly undervalued right now, a few, such as Ethereum Name Service (ENS), MANTRA (OM), and Reserve Rights (RSR), are in or near the Danger Zone. The Danger Zone, which occurs below -1, is the counterpart to the Opportunity Zone, where coins become overvalued.
Ethereum Price
Ethereum, the largest among the altcoins, faced a dive of more than 4% in the last 24 hours, which took its price below the $3,300 level.