Altcoins Wipe Further Losses; Could Dogecoin Bounce Back Soon?

According to on-chain statistics, Dogecoin (DOGE) is one of the most significant losers for 6-month traders, which may create a possibility that the price will go up.

Dogecoin’s MVRV could therefore act as a buy signal as the crypto asset nears key on-chain points.

In a recent post shared by the on-chain analytics firm, Santiment, it was reported that altcoins such as Dogecoins and XRP are exhibiting tendencies in trader’s returns in multiple time horizons. One of the ratios evaluated is the Market Value to Realized Value (MVRV) that represents the relation between market capitalization and the realized capital – total value invested in the asset.

In particular, when MVRV is more than 1 investors are mostly in an unrealized profits state, conversely, below 1—the market is primarily red. Previously, the market situation was such that cryptocurrencies are at the highest price when the majority of investors make large unrealized profits and vice versa. On the other hand, price bottoms is identified when the investors are in loss and when there is seller exhaustion.

In addition, Santiment created the “Opportunity & Danger Zone Model” that prescribes which assets are undervalued or overvalued depending on how far their MVRV in the mid-term are from the norm. Based on this model, Dogecoin, Toncoin(TON), Ethereum (ETH) are some of the altcoins that have suffered the biggest traders 6-month loss putting them in what Santiment describes as the Opportunity Zone.

The 6-month traders have been hit a low of 32% for Dogecoin trader, Toncoin stands at 23% and Ethereum at 22%. XRP, in particular, is a quite different picture – 6-month traders do have a profit which may point to the fact that using it for trading profit retrieval is not the most suitable right now.

DOGE Price Outlook

Currently, Dogecoin hover around $0. 12014 is 0975 after extending the pull back by over 3% in the past week. While it shows that newer DOGE investors are even now suffering losses Santiment states this equates to a perfect buy-in opportunity.

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