While the cryptocurrency market is experiencing some exciting days with Bitcoin breaking a new all-time record and Ethereum approaching it, analysis firm Santiment has taken a closer look at the current state of the market.
In a video they published, company analysts evaluated market sentiment and possible future movements using on-chain and social metrics.
According to Santiment’s analysis, despite the price increase, Bitcoin’s trading volume has declined since its peak in July. This is being interpreted as a sign of a “bearish divergence” in the market. Similarly, daily active addresses and network growth are also declining, raising questions about the sustainability of the price increase.
Meanwhile, Santiment’s analysis of MVRV (Average Realized Value Ratio) points to a “slight danger zone” for Bitcoin. The long-term MVRV of 21% suggests that prices may remain under some pressure. The situation is different for Ethereum, where its 90-day MVRV is 40% and its 365-day MVRV is 57%. Analysts warn that these high values could lead to further price declines.
Santiment data also reveals the behavior of different investor groups in the market. Large investors, known as “whales,” who hold between 10 and 10,000 Bitcoin, have been accumulating continuously since March 22nd and have not sold their assets even after the recent price record. This is considered a positive signal, as it demonstrates the whales’ confidence in the market and their long-term perspective. However, individual investors holding less than 0.1 Bitcoin are also buying. Analysts note that simultaneous buying by both large and small investors generally indicates a need for a market “cooling.”
The rise in “buy on the dip” rhetoric on social media following the recent price drop is generally considered a contrarian indicator, suggesting some over-optimism in the market. Analysts caution that all of these indicators represent market euphoria and that investors should exercise caution.
*This is not investment advice.