Dogecoin (DOGE) has once again found itself in the crosshairs of market watchers, with a “blood in the streets” moment emerging according to data from on-chain analytics firm Santiment. The company’s latest research, shared on January 8 via and Dogecoin.
“Average trading returns are a great representation of whether ‘buying low’ or ‘selling high’ is actually the right time,” Santiment said, noting that current on-chain metrics indicate an environment in which many crypto assets are in oversold territory.
“When MVRVs are negative, it means that a purchase or addition to your stake is being made while others are already at a loss. Historically, these ‘blood in the streets’ moments are when professional traders make money,” Samtiment writes.
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 is -7.71%, Cardano’s is -6.69%, and Dogecoin’s is -8.89%.
Simply put, MVRV compares the total market capitalization of a cryptocurrency (its “market value”) with the total cost base of holders (its “realized value”). A negative MVRV often indicates that the average holder is currently underwater on their position.
For Dogecoin, the MVRV ratio of -8.89% suggests that, on average, investors who acquired DOGE in the last 30 days are experiencing notable unrealized losses. This contrasts with BTC’s less pronounced 3.73% decline, indicating that short-term holders of Dogecoin are, on average, deeper in the red compared to those of Bitcoin. Ethereum (-7.71%) and Cardano (-6.69%) are also facing negative territory, but their holders are faring slightly better than Dogecoin over the past month.
Since DOGE’s MVRV is the most negative among the four mentioned, there is potential for a stronger recovery rebound if market conditions stabilize. However, it also highlights higher risk if broader crypto sentiment remains fragile. As Santiment noted, traders often look for 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 crypto market sell-off. On Tuesday, January 7, US bond yields jumped following surprisingly robust economic indicators, with the 10-year Treasury yield rising to 4.67%.
Much of the market anxiety focused on the higher-than-expected ISM Prices Paid Index, a measure that can herald inflation, as well as a surprise rise in JOLTS job openings data . Faced with signs of labor market strain and possible inflationary pressures, investors have turned to risk-averse strategies, hitting crypto assets across the board.
“Cryptocurrency markets are sinking further, indicating near-to-medium term buying zones for most assets,” reads the chart published by Santiment. With this in mind, Dogecoin’s current slowdown aligns with the broader market narrative. If concerns over yields and inflation continue to dominate the news, we can expect more cautious capital flows into risky assets. Conversely, any signal of slowing inflation or a less restrictive stance from the Federal Reserve could catalyze a recovery, which could be amplified by negative MVRV ratios across the board.
Nonetheless, the mixed signals create a tricky trading environment. On the one hand, Santiment’s metrics indicate favorable historical conditions for those looking to accumulate, notably for DOGE at -8.89% MVRV. On the other hand, uncertain macroeconomic data – from Treasury yields to inflation figures – could hamper any near-term recovery.
For now, Santiment’s outlook is measured: “Don’t assume these opportunity zone signals will result in an immediate turnaround.” But the odds point to at least a near-to-medium term turnaround for crypto soon, assuming economic or geopolitical factors don’t get in the way.
At press time, DOGE was trading at $0.33.
