Ethereum Name Service (ENS) and these four altcoins show signs of a price plunge amidst a rise in profit-taking. The MVRV (market-value-to-realized-value) ratio compares an asset’s current market valuation to the total amount paid for it by investors.
When the market capitalization is much higher than the realized capitalization, it often signals that prices have become detached from fair value due to excessive speculation. This scenario typically foreshadows an impending sell-off as investors seek to lock in profits. At present, these five altcoins show inflated 30-day MVRV ratios, implying they may be overbought.
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Five altcoins to keep an eye on
Ethereum Name Service (ENS)
The blockchain domain name provider ENS has a sky-high 30-day MVRV of 54.19%, according to Santiment. Such an elevated level means over half of ENS tokens are held in wallets with unrealized profits. This concentration of gains makes ENS highly vulnerable to a wave of profit-taking.
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Arbitrum (ARB)
The Ethereum scaling solution ARB exhibits a 30-day MVRV ratio of 40.03%. Given that around 40% of the coin supply represents latent gains, a price retreat seems likely if holders move to cash out.
Ethereum (ETH)
Even Ethereum, the second-largest cryptocurrency, displays a heightened 30-day MVRV of 13.02%. While lower than the previous cryptos, this still suggests around 13% of ETH’s market cap exists as unrealized gains—a sizeable level given ETH’s $157 billion valuation.
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Maker (MKR)
The governance token of the MakerDAO lending platform has an elevated 30-day MVRV level of 24.48%. Such a reading implies the asset has experienced significant price appreciation relative to investor costs, priming it for potential profit-taking.
Mantle (MNT)
Mantle, which facilitates cross-chain decentralized finance, shows an MVRV ratio of 27.22% over the past month. With over a quarter of MNT’s market cap backed by paper profits, selling activity could quickly escalate.
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Should investors worry?
Despite their stretched valuations, selling now does not guarantee maximized profits, as crypto markets see frequent volatility spikes. Still, the current MVRV readings highlight vulnerabilities in these assets should even minor selling arise.
For investors, balancing MVRV insights and intrinsic analysis tailored to one’s strategy is key before reacting.