Analytics firm Santiment is highlighting possible entry points for half a dozen altcoins amid a general downtrend which has given the crypto markets an extended pullback throughout January.
In its weekly Insights newsletter, Santiment says that while most crypto investors are feeling pain, opportunities exist for those with patience and some handy cash.
The data firm says that the market value to realized value (MVRV) metric, which reveals the average profit/loss for coins in circulation, is helpful when hunting for crypto bargains.
“MVRV is a great metric to gauge how deep traders are into pain or euphoria zones.
We commonly like to look at an asset’s 30-day MVRV, specifically, because it reveals what weekly swing traders can likely take advantage of, as far as mid-term trading goes… Blending in how much pain short-term, mid-term, and long-term traders are experiencing all together, can paint an even clearer picture.”
Looking at the MVRV metric, Santiment names six altcoins that can potentially bounce as traders feel pain.
One crypto asset on the list is open-source digital currency XRP, which the insights firm says is primed for a rally after a strong move down.
“The polarizing project is at its most negative average MVRV level since late June. It was last in positive territory in mid-December, making it a solid candidate to have a price upswing to bring traders some relief.”
When it comes to decentralized exchange Uniswap (UNI), the crypto insights firm says,
“Uniswap’s average MVRV is at all-time negative MVRV levels.
An uptick in the general crypto markets may go very well for a mostly respected altcoin like UNI.”
Decentralized blockchain indexer The Graph (GRT) is also at MVRV lows, with Santiment noting,
“Its average MVRV was last positive in late November.”
Looking at decentralized crypto lending and borrowing protocol Compound (COMP), Santiment says,
“Compound is also at its most negative average MVRV level since late June.”
As for layer-2 ZK (zero-knowledge) rollup protocol Loopring (LRC), the analytics firm says LRC still has some upside potential.
“Loopring has already been in the midst of a nice-sized bounce compared to the rest of the altcoin pack over the past week, [but it] is still in a nice, deep negative average MVRV spot.”
Last on the list is lending and borrowing protocol Aave (AAVE), which also hasn’t seen much positive price action in more than two months.
“AAVE is sitting at near all-time negative levels, which is great to see if you’re considering buying.”
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