- Bitcoin, Ethereum, Cardano, XRP, and Chainlink trade below value, offering potential entry points for buyers.
- Negative MVRV means average traders are at losses, making now a lower-risk time to invest.
- Stablecoin supply is shrinking, limiting liquidity and slowing potential crypto market recoveries.
Crypto investors might be at an important point as major coins start looking undervalued. Santiment’s latest 30-day MVRV data shows Bitcoin, Ethereum, Cardano, XRP, and Chainlink are all trading below what most investors originally paid. ChainLink is down the most at -9.5%, followed by Cardano at -7.9%, Ethereum at -7.6%, XRP at -5.7%, and Bitcoin at -3.7%.
Right now, many average traders are at a loss, which could be a good chance for new investors to jump in. Santiment said that negative MVRV numbers mean buying now carries lower risk because most profits are still below the usual “zero-sum game” level.
Looking at market zones helps make sense of this. The Strongly Overvalued Zone shows extreme hype, while Mildly Overvalued means prices are a bit high. The Neutral Zone reflects a fair balance between buyers and sellers.
On the other hand, Mildly and Strongly Undervalued Zones show coins trading below their true value. So, coins in these zones may be early opportunities to buy. Plus, recent price drops suggest a move away from past overvalued levels, giving investors a chance to get in before prices potentially rise
Stablecoin Outflows Limit Short-Term Liquidity
Santiment also highlighted the major shifts that occurred in the stablecoin market. The top 12 stablecoins lost $2.24 billion in just ten days, which occurred simultaneously with the 8% decline in Bitcoin. This indicates that investors are transferring their funds to safer assets, such as gold and silver, which recently broke records.
The decline in the number of stablecoins indicates that money is moving away from cryptocurrency rather than being inert. Because there is less money available, it is more difficult for lesser altcoins to quickly recover in value. Before witnessing a robust market recovery, investors may need to wait until stablecoins begin to grow once more.
In the past, rising stablecoin totals have typically indicated new investment in cryptocurrency as well as increased confidence. So, while undervalued coins look like a good buy, limited liquidity could slow how fast prices bounce back.
