Amid the ongoing uncertainty in the crypto market, one on-chain statistic indicates that Chainlink (LINK), Cardano (ADA), and Ethereum (ETH) could all be significantly undervalued.
Digital asset analytics firm Santiment says all three assets are showing negative rates for their 30-day market value to realized value ratio (MVRV).
The MVRV is the ratio of a crypto asset’s market capitalization to its realized capitalization, or the value of all coins at the price they were purchased at.
When the MVRV value falls below zero, it indicates that the asset is oversold as traders who bought it on a certain time frame are witnessing losses.
Explains Santiment,
“The lower a coin’s 30-day MVRV is, the less risk there is in opening or expanding your position.
A coin with a negative percentage means that the average trader you are competing with is short of money, and there is an opportunity to participate while winning below the normal “zero-sum game” level. The more negative, the safer it is for you to buy.
A coin with a positive percentage means that the average trader you are competing with has won money, and there is an increased risk of participating while winnings are above the normal “zero-sum game” level. The more positive, the more dangerous it is for you to buy.”
Chainlink’s 30-day MVRV rate is -9.5%, Cardano’s is -7.9%, and Ethereum’s is -7.6%.
XRP also shows an “undervalued” ratio of -5.7%, while Bitcoin (BTC) is “slightly undervalued” with a score of -3.7%, according to the analytics firm.
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Featured image: Shutterstock/Gorodenkoff/Sensvector