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While the leading cryptocurrency Bitcoin has climbed above $66,000 with the upward momentum it has gained in recent days, the picture also looks positive for altcoins.
However, Santiment warns against the rise in the short term for $BTC and some major altcoins.
In this context, the cryptocurrency analysis platform Santiment examined MVRV ratios. As recovery signals for $BTC and altcoins strengthen, the 30-day MVRV ratio of the cryptocurrencies with the highest market capitalization has risen back above the neutral level.
According to Santiment, major cryptocurrencies, including Bitcoin ($BTC), Ethereum, and $XRP, have entered profit-taking territory in the last 30 days. This indicates that investors who bought $BTC, ETH, $XRP, Cardano (ADA), and Chainlink (LINK) in the last 30 days have made a slight profit rather than incurring losses.
Santiment analysts believe that the recovery is driven by lower-than-expected inflation data, increased risk appetite in global markets, and renewed demand for spot Bitcoin ETFs.
While the MVRV ratio entering positive territory is considered a positive development, Santiment warned that this could trigger increased selling pressure in the short term due to profit-taking. This means that even if prices continue to rise, selling pressure could intensify.
According to Santiment, positive MVRV data supports the idea that the recovery is progressing healthily, but if the upward momentum weakens, short-term investors may want to realize their profits, increasing price volatility.
“…Positive MVRVs tell us that the recovery is real, while also reminding bulls that short-term gains could lead to faster sell-offs if momentum starts to cool.”
*This is not investment advice.
coindesk.com
thenewscrypto.com