Altcoins
Shiba Inu and XRP Form Bullish Divergence, Analytics Firm Reveals
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’s Z-Score indicates that XRP and Shiba Inu traders are currently suffering losses
In a new job On X, Santiment explained how the various major coins in the cryptocurrency sector look on the MVRV Z-Score.Market Value to Realized Value (MVRV) Ratio” is a popular indicator that, in short, measures the gap between the total value held by investors of an asset (i.e., the market capitalization) and what they used to buy it (the cap made).
When the value of this indicator is positive, it means that holders of the cryptocurrency as a whole are currently holding unrealized net profits. On the other hand, a value below zero suggests the predominance of losses in the market.
Now here is the chart shared by the analytics firm that shows the trend of MVRV Z-Score for different top assets by market cap over the past few months:
As seen in the chart above, Bitcoin (BTC), Ethereum (ETH), Dogecoin (DOGE), and Toncoin (TON) are all currently in positive MVRV Z-Score territory, suggesting that their average traders are currently making profits.
At the same time, XRP (XRP), Cardano (ADA), Shiba Inu (SHIB), Chainlink (LINK), Polygon (MATIC) and Uniswap (UNI) are seeing their investors suffer an unrealized loss greater than their profit.
In general, for-profit investors are more likely to sell their coins, and the likelihood of this happening profit taking only increases as gains are greater. As such, a high MVRV Z-score has historically led to highs for the price of any cryptocurrency.
Among the four assets in the positive territory of the indicator at the moment, Toncoin has the indicator at the highest level, suggesting that a sell-off due to profit-taking could be likely for it.
In the case of cryptocurrencies located in the negative zone, their prices could rather see a bullish outlook, as there may not be many sellers left for them at the moment. Shiba Inu and Uniswap in particular are experiencing the largest deviation between the market and the realized ceiling.
“If you think markets are about to surge, history tells us that buying assets where traders have had the most trouble has a higher probability of earning you high returns,” Santiment notes. So, cryptocurrencies like SHIB may offer the best buying window right now, according to the MVRV Z-Score.
SHIB Price Analysis
Shiba Inu has been consolidating sideways over the past month, with its price still trading around $0.0000168.
Featured image from Shutterstock.com, Santiment.net, chart from TradingView.com