Altcoin markets are again being hit particularly hard, but analytics firm Sentiment sees a ray of hope.
According to on-chain analysis platform Sentiment, there are several emerging opportunities for altcoin investment.
On March 9, the firm said that altcoins are back in the buy zone, which has not been seen since early January.
It used the market-value-to-realized-value (MVRV) ratio to figure out which were most undervalued.
“If you have been waiting for a time to buy altcoins when there is blood in the streets, our MVRV model indicates that the time has come.”
Altcoin market in the red
Most altcoins remain down more than 80% from their 2021 all-time highs. However, Sentiment’s MVRV findings have identified a handful that could be good for long-term gains.
MVRV is the ratio of an asset’s market capitalization versus its realized capitalization. A comparison of these two metrics can be used to know when prices are above or below ‘fair value’ to assess market profitability.
Higher values greater than about 3.5 indicate largely unrealized gain in the system. According to Glassnode, this increases the likelihood that investors will distribute the coins to lock in profits.
According to Sentiment, those shining in the underbought signal include 0x, DYDX, Yearn Finance (YFI) and some obscure altcoins.
Looking at the prices of high-cap altcoins, many are well below their peaks. These include Ripple (XRP) 88%, Cardano (ADA) 89%, Dogecoin (DOGE) 90%, Solana (SOL) 93% and Polkadot (DOT) 90%.
These losses are greater than the overall crypto market, which is down 66% from its peak of $3 trillion in November 2021.
By comparison, both Bitcoin (BTC) and Ethereum (ETH) are down 68% from their all-time highs.
crypto markets retreat
Crypto markets retreated 1.7% on the day, as total capitalization sank to $1.04 trillion, according to coingeco,
Bitcoin was trading down 1.8% at $21,773 during the Asian trading session on Thursday morning. BTC is now at a three-week low, down 10% over the past two weeks.
Ethereum is down 1.3% to $1,541 at the time of writing. However, ETH’s fortnightly loss is only around 6%.
Altcoins are finishing as expected, with Polygon (MATIC), Solana (SOL), Cosmos (ATOM) and Lido (LDO) suffering heavy losses.
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