Comprehensive Analysis of Altcoin Buy Zones According to Santiment
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Current Altcoin Market: A Potential Opportunity for Mid-Term Traders
In a recent analysis shared on X, the on-chain analytics firm Santiment has outlined the findings of its MVRV Opportunity & Danger Zone Divergence Model, focusing on the altcoin market. The model utilizes the well-regarded “Market Value to Realized Value (MVRV) Ratio” to assess investment opportunities.
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Understanding the MVRV Ratio
The MVRV Ratio is an essential on-chain metric that provides insights into whether cryptocurrency investors are collectively in a profit or loss position. When the ratio exceeds one, it indicates that the average investor is experiencing profits. Conversely, a value below one signifies prevalent losses among investors.
The profitability of holders often influences the price dynamics of digital assets. When investors see substantial profits, the temptation to sell and lock in gains can hinder upward momentum, potentially leading to a price peak. On the flip side, when holders are at a significant loss, the absence of profit-taking can create conditions for a price bottom.
The MVRV Opportunity & Danger Zone Divergence Model
Santiment’s model leverages these historical patterns to identify optimal buy and sell zones for altcoins. By analyzing the divergence of the MVRV Ratio over various timeframes (30 days, 90 days, and 6 months), the model determines whether an asset is positioned within these zones.
According to Santiment’s chart, most altcoins are currently situated in the buy region based on this model. In this context, a divergence value above zero suggests negative average trader returns for the specified period, the opposite of the traditional MVRV Ratio, where zero replaces the role of one.
The data reveals that nearly all altcoins exhibit a positive MVRV divergence across different timeframes, with many exceeding a divergence value of one in the mid-term. This places them in the opportunity zone, signaling a potential buy for most altcoins.
These negative returns coincide with market volatility, linked to recent tariff-related news. Despite the buy signal, ongoing market uncertainty could persist. Santiment highlights that a resolution to global tariff disputes could spark a swift cryptocurrency recovery. However, this remains speculative amid escalating tensions described as a full-scale “trade war” involving the US and numerous countries worldwide.
Bitcoin (BTC) Price Overview
Currently, Bitcoin is trading around $76,900, reflecting a decline of over 9% in the past week. The cryptocurrency’s recent recovery attempt has been reversed.
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