New data from market intelligence firm Santiment suggests that altcoins may have the potential to recoup some of their losses from the crypto market’s sharp downturn last week. According to Santiment, altcoins are currently showing signs of undervaluation following the drop, which has left investors divided on how quickly the markets can recover.
To determine whether a crypto asset is overvalued or undervalued, Santiment uses the market value to realized value (MVRV) metric. The firm finds that the majority of altcoins are trading in the underbought zone, indicating that they may be undervalued compared to their potential. This presents a mathematically historic opportunity for investors, as average crypto returns are currently in this undervalued zone.
Last week’s crash in the crypto market was one of the sharpest drops witnessed this year. However, Santiment points out that Bitcoin (BTC) whales have remained extremely active during the downturn. This means that despite the market drop, large transactions of $1 million or more in Bitcoin have been occurring, indicating that whales are continuing to buy and sell actively. The number of large wallets holding Bitcoin is also not decreasing, suggesting that there is ongoing interest and activity in the market.
At the time of writing, Bitcoin is trading at $26,130, which is a slight increase over the past 24 hours. However, it is still a 13% decrease from its seven-day high of $29,652. This indicates that there is still some volatility and uncertainty in the market, with the potential for further price fluctuations.
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Despite the recent market downturn, there are reasons to be optimistic about the future of altcoins and the crypto market as a whole. The undervaluation of altcoins presents an opportunity for investors to potentially profit as the market recovers. Additionally, the continued activity of Bitcoin whales suggests that there is ongoing interest and investment in the market, which could contribute to its recovery.
It’s important to note that investing in crypto assets comes with risks. The market is highly volatile and can experience sharp downturns, as evidenced by last week’s drop. Investors should always do their due diligence and research before making any investment decisions. It’s also advisable to diversify one’s portfolio to mitigate risk.
In conclusion, while the recent market downturn has caused losses for many altcoins, there are indications that they may be undervalued and have the potential to recover. The ongoing activity of Bitcoin whales and the undervaluation of altcoins present opportunities for investors. However, it’s important to approach crypto investments with caution and to do thorough research before making any decisions. The market remains volatile, and investors should be prepared for further price fluctuations.
