- Bitcoin whales played an active role in the recent BTC downturn, according to a report by Santiment.
- Many altcoins could be presenting buying opportunities as they are in the oversold region, based on the latest MVRV report.
- If BTC sales continue, altcoins could potentially drop even lower than their current prices.
A recent downturn in the cryptocurrency market has resulted in double-digit losses for investors. However, this chaos could present opportunities, as past downturns have often been followed by rapid recoveries and substantial gains in altcoins. The latest report from Santiment suggests caution.
Market Downturn and Its Impacts
While no technical analysis, expert, or on-chain indicator can predict the future or guarantee profits from any cryptocurrency, they can indicate the likelihood of an uptrend. New data shared by crypto on-chain analysis firm Santiment suggests that altcoins may be able to recover some of their losses from the sharp downturn in the crypto market last week. According to the crypto analysis platform, altcoins are showing “overwhelmingly low valuations” after last week’s bloodbath, leaving investors divided on how quickly the markets can recover.
Potential Recovery for Altcoins
The MVRV data is generally used to measure whether a crypto asset is overvalued or undervalued. This metric, known as Market Value to Realized Value (MVRV), is often used by investors looking for oversold signals. Santiment notes that last week’s crash was one of the “sharpest declines” witnessed this year, but Bitcoin (BTC) whales remained extremely active during the downturn. Investors should also be cautious of larger oversells, as larger drops in BTC price could cause altcoins that appear in the buying zone to hit much deeper lows.
Risks and Opportunities
In summary, the recent downturn in the crypto market has presented potential buying opportunities in altcoins, according to data from Santiment. However, investors should exercise caution as further declines in BTC could cause altcoins to drop even lower. Despite the uncertainty, the crypto market has historically shown resilience and the ability to recover from sharp downturns.
