The recent cryptocurrency market downturn has seen the prices of major cryptocurrencies including Bitcoin, Ethereum, XRP, Dogecoin, and Cardano drop significantly. A little-known metric, however, suggests a short-term bounce is due.
That’s according to data shared by on-chain analytics firm Santiment, which notes that the lower a cryptocurrency’s 30-day Market Value to Realized Value (MVRV) ratio, a metric used to gauge market sentiment and predict future price movements, the “higher the likelihood we see a short-term bounce.”
The 30-day MVRV ratio compares the current price of an asset with the average price at which it was acquired in the last month. A lower MVRV suggests the asset is undervalued, potentially indicating a price upswing in the near future.
According to Santiment’s data, Bitcoin and Ethereum currently sit at -4.0% and -4.3% on the 30-day MVRV scale, respectively, suggesting a mildly bullish outlook. XRP, however, holds a more promising -3.5%, while Cardano boasts a significantly lower -12.6%, indicating a stronger potential for a rebound.
Notably while the price of Bitcoin dropped 6.3% over the last seven days, Ethereum is down by 2.7% while XRP moved up 0.5% and Cardano lost a whopping 11.7% of its value over the same period.
Market analysts are also echoing Santiment’s optimistic outlook, particularly for XRP and Cardano. A pseudonymous analyst going by Cryptobilbuwoo shared a weekly chart-based analysis suggesting a correlation between XRP’s price movements and altcoin dominance (ALT.D).
Also read: AI Prediction: XRP ($XRP) vs. Cardano ($ADA) – Which Is Likely the Better Buy for the Rest of 2024
His analysis suggests that whenever ALT.D retests an upward trend line, XRP tends to rise, positively impacting the entire altcoin market. Based on his technical analysis, XRP could potentially surge to $2.71, signifying an impending technical rebound.
Meanwhile analysts are suggesting the price of Cardano could soon rebound and its current price level is “an incredible opportunity” to dollar-cost average (DCA) into the cryptocurrency as its price trends down.
Featured image via Unsplash.