Altcoins Primed for Historic Upswings Despite Realized Losses, Santiment Reveals

Analytics firm Santiment anticipates substantial rallies in altcoins following a month-long cryptocurrency correction. Over 85% of tracked assets exhibit "historic opportunity zones" based on market value to realized value (MVRV). With MVRV indicating undervaluation, altcoins are positioned for potential gains. Traders are shifting focus from volatile assets like Dogecoin towards more stable crypto assets such as Bitcoin.

Altcoins Poised for Historic Rallies Amidst Realized Losses, Santiment Analysis Reveals

In the wake of a month-long crypto market correction, analytics firm Santiment has released a comprehensive report indicating that the majority of altcoins are positioned for a significant rally. The firm's analysis suggests that the ongoing pullback has prompted altcoin traders to unload their holdings, resulting in substantial realized losses.

According to Santiment's model, the average gains and losses incurred by traders indicate that most altcoins have experienced heavy losses. Over 85% of the assets tracked by the firm are currently within an exceptional opportunity zone, based on the market value to realized value (MVRV) ratio of wallets' collective returns over one-month, three-month, and six-month cycles.

The MVRV ratio is a widely used on-chain indicator that measures the extent to which a crypto asset is undervalued or overvalued. Historically, when the MVRV ratio is at low levels, it suggests that the asset is undervalued and presents a potential buying opportunity.

Based on the current MVRV readings across multiple time frames for the majority of altcoins, Santiment believes that these assets may be in a "historic position" to witness a significant rally. The firm advocates for the adoption of a "contrarian" approach, suggesting that investors should consider buying while the market exhibits signs of fear and uncertainty.

Amidst the anticipation of a potential rally, Santiment observes a shift in investor sentiment away from highly volatile altcoins like Dogecoin (DOGE) and towards crypto assets that have demonstrated resilience in the face of market turbulence.

The report highlights the steady growth in the number of non-empty Bitcoin wallets despite the volatile price action. In contrast, altcoin wallets for assets like Dogecoin have seen a decline in activity following significant increases earlier this year. Cardano is one of the few exceptions, experiencing a drop in active wallets.

At the time of writing, DOGE is trading at $0.149, down over 34% from its 2024 high of $0.228. Bitcoin, on the other hand, is valued at $64,000, marking a 13% decrease from its 2024 high of $73,650.

Santiment's analysis provides valuable insights into the current state of the altcoin market and the potential opportunities that lie ahead. By carefully monitoring the MVRV ratio and understanding the dynamics of trader sentiment, investors can make informed decisions about their altcoin investments and position themselves for potential gains in the coming months.