On-chain analytics firm Santiment has revealed how Bitcoin, XRP, and other cryptocurrencies have dropped into a “buy zone” on a popular metric.
When the value of the MVRV Ratio is greater than 1, it means the market cap is greater than the Realized Cap. In other words, the overall network is in a state of profit. On the other hand, an indicator below this threshold implies the dominance of losses among investors.
In the context of the current topic, the version of the MVRV Ratio that’s of interest is the 30-day one, tracking the profit-loss balance of the traders who purchased their coins within the past month.
Below is the chart for the metric shared by Santiment that shows the trend in its value for five major cryptocurrencies: Bitcoin, XRP, Ethereum, Chainlink, and Cardano:
The 30-day investors have suffered even worse losses in the case of Ethereum, Cardano, and Chainlink, being down 15.4%, 19.7%, and 16.8%, respectively. All of these fall inside Santiment’s “extreme buy zone.”
“In a zero sum game, buy assets when average trade returns of your peers are in extreme negatives,” noted the analytics firm. “The lower MVRV’s go, the higher the probability is of a rapid recovery.”
It now remains to be seen whether market pain has been enough for XRP and others to cause a market rebound, or if more drawdown is coming.
At the time of writing, XRP is floating around $2.18, down more than 11% over the last week.
