MVRV Ratio: Check your cryptocurrency market temperature.
The latest analysis from Santiment uses the MVRV ratio to identify cryptocurrencies that may be undervalued and overvalued:
- **Low Assessment Area** (Negative MVRV): XRP (-6.1%) and Cardano/ADA (-4.4%) are showing higher growth potential with lower risks for new positions.
- **High Assessment Area** (Positive MVRV): Bitcoin and Ethereum are signaling potential adjustment risks as average traders are in profit.
- **Neutral Zone**: Chainlink (LINK) is in a middle position.
Think of MVRV as a market temperature gauge - it compares the current price to the average purchase cost across all holders. When negative, most investors are at a loss (which could be a good entry point); when positive, most are in profit (potential selling pressure).
This indicator can be particularly useful for timing reversal trades, as a lower 30-day MVRV value often indicates lower downside risk when opening new positions.
Remember to do your own research before making any investment decisions!
Content is for reference and discussion purposes only, not investment advice.
