Dogecoin (DOGE) has found its way back into 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 researchshared on January 8 via X, highlighting a series of negative MVRV (Market Value to Real Value) ratios across the crypto landscape – including Bitcoin (BTC), Ethereum (ETH) , Cardano (ADA)and Dogecoin.
“Average trading results are a good representation of whether it is the right time to 'buy low' or 'sell high,'” said Santiment, stressing that current chain metrics indicate an environment where many of crypto assets sitting in oversold territory.
“When MVRVs are negative, this means that you are buying or adding to your portfolio while others are already at a loss. Historically, these 'blood in the streets' times are when professional traders make money,” Samtiment writes.
The data released by Santiment includes the 30-day MVRV ratios for four major funds as of January 8. The MVRV ratio of Bitcoin is -3.73%, Ethereum is -7.71%, Cardano is -6.69% and Dogecoin is -8.89%.
Simply put, MVRV compares the total market capitalization of a cryptocurrency (its “Market Value”) to the total cost basis of holders (its “Real Value”). A negative MVRV often indicates that the average keeper is currently underwater on their position.
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For Dogecoin, the -8.89% MVRV ratio suggests that – on average – investors who received DOGE in the last 30 days are sitting on a certain unrealized loss. This is in contrast to BTC which is less visible -3.73%, showing that Dogecoin short-term holders are, on average, deeper in the red compared to Bitcoins. Ethereum (-7.71%) and Cardano (-6.69%) are also facing negative territory, but their holders are slightly better than Dogecoin over the last month.
As DOGE's MVRV is the most negative among the four mentioned, there is a possibility of a stronger recovery kick if market conditions hold. However, it also underscores higher risk if broader crypto sentiment remains volatile. As Santiment said, traders often scan for a negative MVRV as a potential opportunity to “buy low,” but this is by no means a guarantee of an immediate upside.
Buy Or Sell Dogecoin Now?
Santiment's analysis highlights how macroeconomic forces have accelerated the recent crypto market selloff. On Tuesday, January 7, US bond yields rose following unexpectedly strong economic signals, with the 10-year Treasury rising to 4.67%.
Much of the market's concern focused on the higher-than-expected ISM Paid Price Index, a metric that could signal inflation, as well as a surprise increase in the JOLTS job openings data. With tight marks in the labor market and possible inflationary pressuresinvestors engaged in risk strategies, hitting crypto assets across the board.
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“Crypto markets sink further, revealing short- to medium-term buy zones for most assets,” Santiment's published chart reads. In this way, the current decline in Dogecoin matches the broader market narrative. If yield and inflation concerns continue to dominate the headlines, we can expect more cautious capital flows into risk funds. On the other hand, any sign of cooling inflation or a less restrictive Federal Reserve stance could trigger a rally – one that could be boosted by negative MVRV ratios in general.
Nevertheless, the different indicators make a difficult trading environment. On one hand, Santiment's metrics point to historically beneficial conditions for those looking to accumulate, especially for DOGE at -8.89% MVRV. On the other hand, uncertain macro data – from Treasury results to inflation prints – could hamper the near-term recovery.
For now, Santiment's view is measured: “Don't assume that these opportunity zone indicators will lead to an immediate turnaround. But probabilities point to at least a short- to medium-term turnaround for crypto in the near future, assuming no economic or geopolitical factors get in the way. “
At press time, DOGE was trading at $0.33.
Featured image created by DALL.E, a chart from TradingView.com
