Dogecoin Hits A ‘Blood In The Streets’ Moment: Buy Or Sell Now?
Dogecoin (DOGE) is once again the focus of market observers, with a “bloody street” moment underway, according to on-chain analytics firm Santiment. The company’s latest ResearchShared via Cardano (ADA)and Dogecoin.
“Average trading returns are a good indicator of whether ‘buy low’ or ‘sell high’ is indeed the right time,” Santiment said, stressing that current on-chain indicators indicate that many crypto assets are in oversold territory.
“When MVRV is negative, it means you are buying or adding to your holdings while others are already losing money. Historically, these ‘bloody in the streets’ moments are when professional traders make money, ” Samtiment wrote.
The data released by Santiment includes 30-day MVRV ratios for four major assets as of January 8. Bitcoin’s MVRV ratio is -3.73%, Ethereum’s -7.71%, Cardano’s -6.69%, and Dogecoin’s -8.89%.
Simply put, MVRV Compare the total market capitalization of a cryptocurrency (its “market value”) to the total cost basis of its holders (its “real value”). A negative MVRV usually indicates that common holders are currently underwater.
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For Dogecoin, the MVRV ratio of -8.89% indicates that, on average, investors who acquired DOGE in the past 30 days are facing significant unrealized losses. This contrasts with BTC’s less pronounced -3.73%, suggesting that short-term holders of Dogecoin are, on average, suffering deeper losses than Bitcoin. Ethereum (-7.71%) and Cardano (-6.69%) are also facing negative values, but their holders have performed slightly better than Dogecoin over the past month.
Since DOGE’s MVRV is the most negative of the four indicators mentioned above, a stronger recovery rally is possible if market conditions stabilize. However, it also highlights higher risks if broader cryptocurrency sentiment remains fragile. As Santiment points out, traders often view negative MVRV as a potential opportunity to “buy low,” but this is by no means a guarantee of immediate upside.
Buy or Sell Dogecoin Now?
Santiment’s analysis further highlights how macroeconomic forces have accelerated the recent sell-off in cryptocurrency markets. On Tuesday, January 7, U.S. bond yields surged as economic indicators were unexpectedly strong, with the 10-year Treasury yield rising to 4.67%.
Market anxiety centered on a higher-than-expected ISM paid price index, a measure that can predict inflation, and an unexpected rise in the JOLTS job vacancies data. With signs of tight labor market and possible inflationary pressureInvestors turned to risk-off strategies and cracked down on crypto assets across the board.
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Charts published by Santiment show “further declines in cryptocurrency markets, indicating short- to medium-term buy zones for most assets.” In this regard, Dogecoin’s current downturn is consistent with the broader market narrative. If concerns about yields and inflation continue to dominate the headlines, we can expect more cautious capital flows into risk assets. Conversely, any sign of cooling inflation or an easing of the Fed’s restrictive stance could catalyze a rally, which could be amplified by an overall negative MVRV ratio.
However, the contrasting signals create a tricky trading environment. On the one hand, Santiment’s indicators point to favorable historical conditions for those looking to accumulate, especially DOGE’s MVRV, -8.89% . On the other hand, uncertain macro data, from Treasury yields to inflation data, could hamper the short-term recovery.
For now, Santiment weighs in on the outlook: “Don’t assume these opportunity zone signals will lead to an immediate upturn. But assuming economic or geopolitical factors don’t get in the way, the odds are that cryptocurrencies will at least turn around in the short to medium term. “
At press time, DOGE was trading at $0.33.
Featured image created using DALL.E, chart from TradingView.com
