XRP, Ethereum Now ‘Undervalued’ On MVRV, Says Santiment

[Ben Graham]

On-chain analytics firm Santiment has pointed out how XRP and Ethereum are among coins sitting in the MVRV Ratio’s “undervalued” zone.

30-Day MVRV Is Negative For XRP & Ethereum

In a new post on X, on-chain analytics firm Santiment has talked about where some notable cryptocurrencies like XRP and Bitcoin currently sit from the perspective of the 30-day Market Value to Realized Value (MVRV) Ratio.

The MVRV Ratio is a popular indicator that tells us how the market cap of a given digital asset compares against its Realized Cap. The latter is an on-chain capitalization model that calculates the asset’s total value by assuming that the value of each individual token is equal to the spot price at which it was last transacted on the network.

In short, what the Realized Cap represents is the total amount of capital that the cryptocurrency’s investors have put into it. In contrast, the usual market cap is just the value that holders are carrying in the present. Since the MVRV Ratio takes the ratio of the two, it essentially provides a look into profitability among investors as a whole. In the context of the current topic, the MVRV Ratio of only a particular segment of traders is of interest: those who purchased within the past month.

Below is the chart for this version of the MVRV Ratio shared by Santiment that shows its trend across five top coins: Bitcoin, Ethereum, XRP, Cardano, and Chainlink.

As is visible in the graph, the 30-day MVRV Ratio has dropped into the negative region for all five of these cryptocurrencies recently, indicating that returns of the monthly buyers have gone into the red.

The analytics firm considers assets to be “undervalued” when this condition forms. “A coin having a negative percentage means average traders you’re competing with are down money, and there is an opportunity to enter while profits are below the normal ‘zero-sum game’ level,” explained Santiment.

Not all tokens with a negative value on the indicator provide an equal opportunity, however. “The lower a coin’s 30-day MVRV is, the less risk there is in opening or adding on to your position,” noted the analytics firm.

Down to a value of -5%, Santiment defines cryptocurrencies to be in a “mildly undervalued” zone. Bitcoin has a 30-day MVRV value of 3.7%, so it falls inside this territory. Meanwhile, XRP and Ethereum have the metric sitting at -5.7% and -7.6%, putting them inside a stronger undervalued region. Out of the tokens in the chart, Chainlink’s 30-day buyers are currently in the most amount of pain with losses of 9.5%.

XRP Price

XRP dropped to a low of $1.8 on Sunday, but the asset has since bounced back above $1.9.