While Cryptocurrency Market has experienced an exciting day with Bitcoin breaking the new all-time record and Ethereum approaching it, analytics company Santiment has taken a closer look at the current state of the market.
In the video they published, company analysts used on-chain and social metrics to assess market sentiment and potential future movements.
Santiment’s analysis shows that despite rising prices, Bitcoin trading volume has been declining since its peak in July. This is interpreted as a sign of “bearish divergence” in the market. Similarly, daily active addresses and network growth is also declining, raising questions about the sustainability of price increases.
On the other hand, the analysis of Santiment (average realised value ratio) of MVRV refers to the “slight danger zone” of Bitcoin. A 21% long-term MVRV suggests that prices may be under some pressure. The situation is different for Ethereum, where MVRV is 40% for 90 days and MVRV is 57% for 365 days. Analysts warn that these high values could lead to further price drops.
Santimento data also reveals the behavior of various investor groups in the market. The large investors known as “whales,” holding 10-10,000 bitcoins, have been accumulating continuously since March 22nd and have not sold their assets even after recent price records. This is considered a positive signal as it shows whales’ confidence in the market and its long-term perspective. However, individual investors who own bitcoin less than 0.1 are also purchasing. Analysts point out that concurrent purchases by both large and small investors generally indicate the need for “cooling” the market.
The increase in “buying via DIP” rhetoric on social media following the recent price decline is generally considered an inverse indicator, suggesting excessive optimism in the market. Analysts should note that all of these metrics represent market well-being and that investors should pay attention to.
*This is not investment advice.
