Altcoins Poised for Historic Buying Opportunity: Santiment Analysis Reveals

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The esteemed blockchain analytics firm Santiment has recently provided some intriguing insight into the state of altcoins – alternative cryptocurrencies – hinting that a significant number of them are poised in a historical buying zone as per their fair value model. This juicy revelation carries the potential to pique the interest of cryptocurrency enthusiasts and traders alike, making it an opportune time to pay attention to this volatile market’s ebb and flow.

Santiment’s analysis is rooted in the examination of the Market Value to Realized Value (MVRV) ratios of various cryptocurrency assets. A critical indicator in understanding the overall profitability of network addresses, the MVRV ratio is a tool that can signal whether traders are currently riding a wave of profits or are navigating the choppy waters of market losses.

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Like many metrics, the intrigue of the MVRV ratio lies in its balance. An MVRV ratio exceeding 1 highlights a thriving market, where investors are basking in the satisfactory glow of net profits. Conversely, a ratio below this threshold paints a somewhat gloomier picture, signifying a market stained by the dark hues of losses.

However, an MVRV ratio precisely equating to 1 illuminates a scenario where the unrealized losses and unrealized profits on the network are perfectly in sync, leading to the average holder standing on the breakeven line. This metric serves as a reminder that the cryptocurrency market can be as cruel as it can be kind.

Looking back to the narratives written in the chapters of cryptocurrency trading history, it is not uncommon to witness an increased likelihood of market corrections following periods of high investor profits. The lure of liquidating those impressive gains proves too tempting for many holders, which can set the stage for this cyclical occurrence. Similarly, when the weight of consistent losses pulls traders under, the market often makes its way back up, buoyed by exhausted sellers.

Armed with these insights, Santiment has meticulously crafted an Opportunity and Danger Zone model. This ingenious model harnesses the divergent MVRV ratio across different timeframes to determine whether a cryptocurrency asset presents a tantalizing buying window or a precarious selling window.

A recently released chart by Santiment presents a comprehensive overview of the altcoin landscape based on this model. Curiously, the analytics powerhouse has inverted the numeric polarity in this model, with values below zero corresponding to profit dominance and those exceeding zero representing loss.

The model interestingly reveals that several altcoins are in the positive region, which implies that their respective investors are currently out of pocket. Prominent among these are Basic Attention Token (BAT), Chromia (CHR), and Highstreet (HIGH), as their MVRV divergence remarkably exceeds the 1 mark.

For the uninitiated, according to this model, the region above the 1 mark is affectionately known as the “Opportunity Zone.” Historical trends have shown that this zone frequently presents some of the most profitable investment avenues.

However, every rose has its thorns, and the cryptocurrency market is no exception. While several altcoins are conveniently situated within the Opportunity Zone, certain coins such as Ethereum Name Service (ENS), MANTRA (OM), and Reserve Rights (RSR) find themselves in or flirting with the dreaded Danger Zone, where overvaluation looms large.

Finally, it’s worth noting the recent plight of Ethereum, the alpha of all altcoins. Ethereum has grappled with a significant price drop of more than 4% in the past 24 hours, taking it below the precariously psychological $3,300 level.

In conclusion, Santiment’s latest analysis provides a magnifying glass for crypto-traders to examine the current state of the altcoin marketplace, teeming with both potential and pitfalls.

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Melinda Cochrane is a poet, teacher and fiction author. She is also the editor and publisher of The Inspired Heart, a collection of international writers. Melinda also runs a publishing company, Melinda Cochrane International books for aspiring writers, based out Montreal, Quebec. Her publication credits include: The art of poetic inquiry, (Backalong Books), a novella, Desperate Freedom, (Brian Wrixon Books Canada), and 2 collections of poetry; The Man Who Stole Father’s Boat, (Backalong Books), and She’s an Island Poet, Desperate Freedom was on the bestseller's list for one week, and The Man Who Stole Father’s Boat is one of hope and encouragement for all those living in the social welfare system. She’s been published in online magazines such as, (regular writer for) ‘Life as a Human’, and Shannon Grissom’s magazine.