Amid continued uncertainty in the crypto market, an on-chain metric indicates that Chainlink (LINK), Cardano (ADA), and Ethereum (ETH) could all be significantly undervalued.
Digital asset analytics firm Santiment claims that all three assets have negative percentages for their 30-day market value to realized value (MVRV) ratios.
MVRV is the ratio of a crypto asset’s market capitalization to its realized capitalization, or the value of all coins at the price they were purchased at.
When the value of MVRV falls below zero, it indicates that the asset is oversold, as traders who purchased it at a certain point in time are experiencing losses.
Explains Santiment,
“The lower the 30-day MVRV of a coin, the less risk there is of opening or adding to your position.
A coin with a negative percentage means that the average traders you are competing with have lost money and it is possible to enter while profits are below the normal “zero sum game” level. The more negative it is, the safer you can buy.
A coin with a positive percentage means that the average traders you are competing with are making money and there is an increased risk of entering when profits are above the normal “zero-sum game” level. The more positive it is, the more dangerous it is for you to buy.
Chainlink’s 30-day MVRV percentage is -9.5%, Cardano’s is -7.9%, and Ethereum’s is -7.6%.
XRP also has an “undervalued” ratio at -5.7%, while Bitcoin (BTC) has a “slightly undervalued” ratio, with a score of -3.7%, according to the analytics firm.
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Disclaimer: Opinions expressed on The Daily Hodl do not constitute investment advice. Investors should conduct due diligence before making high-risk investments in Bitcoin, cryptocurrency or digital assets. Please note that your transfers and transactions are at your own risk and any losses you may incur are your responsibility. The Daily Hodl does not recommend the purchase or sale of cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured image: Shutterstock/Gorodenkoff/Sensvector
