On-chain analytics firm Santiment has revealed how Shiba Inu and XRP are among the altcoins experiencing bullish divergence on the MVRV Z-Score.
MVRV Z-Score says XRP and Shiba Inu traders are currently seeing losses
In new mail In X, Santiment discussed how different leading cryptocurrencies look on the MVRV Z-Score. The “market cap to realized value ratio (MVRV)” is a popular indicator that, in short, measures the deviation between the total value investors hold in an asset (i.e., market cap) and what they used to purchase it (realized value).
When this indicator is positive, it means that holders of the specified currency as a whole are currently holding net unrealized profits. On the other hand, a value below zero indicates that losses dominate the market.
Now, here is the chart shared by the analytics firm that shows the trend in MVRV Z-Score for various major assets by market cap over the past few months:
As shown in the chart above, Bitcoin (BTC), Ethereum (ETH), Dogecoin (DOGE), and Toncoin (TON) are all currently in the positive MVRV Z-Score territory, indicating that regular traders are currently enjoying profits.
Meanwhile, XRP (XRP), Cardano (ADA), Shiba Inu (SHIB), Chainlink (LINK), Polygon (MATIC), and Uniswap (UNI) are seeing their investors take on a higher unrealized loss than profit.
In general, investors who are making profits tend to sell their coins, and the likelihood of this profit-taking only increases as the gains they make increase. As such, a high MVRV Z-Score has historically led to price peaks for any cryptocurrency.
Of the four assets currently in the positive zone of the indicator, Toncoin has the indicator at the highest level, indicating that a profit-taking sell-off may be possible for it.
In the case of coins in negative territory, their prices may see a bullish outlook instead, as there may not be many sellers left for them now. Shiba Inu and Uniswap in particular are seeing the largest deviation between market cap and realized value.
“If you think markets are about to go up, history suggests that buying assets that have suffered the most will increase your potential for higher returns,” Santiment notes. As such, coins like SHIB may offer the best buying opportunity right now, according to the MVRV Z-Score.
SHIB Price Analysis
Shiba Inu has been on a sideways trajectory over the past month as its price continues to trade around the $0.0000168 level.