Bitcoin and Ethereum, the two largest cryptocurrencies by market cap, are down nearly 50 percent from their ATH set last year. The market sentiment is currently bearish and many have predicted that there will be further losses. Kraken predicts a return for these two coins amidst all the bearishness.
Kraken claims that Bitcoin’s Spent Output Profit Ratio (SOPR) and Ethereum’s Market Value to Realized Value (MVRV) Z-score show that ETH and BTC are trading below their fair value, but its In January 2022 crypto on-chain withdrawal is possible. digest
Reportedly, although BTC’s SOPR indicates that most market participants traded BTC at a loss, the situation was significantly worse during Bitcoin’s most recent bull run, falling from $65,000 to $30,000 in May to July 2021. reached a new record high. ,
Furthermore, the MVRV Z-score for ETH indicates that the cryptocurrency is now in ‘oversold’ territory, where it struggled to stay in place long before the price bounced back.
The SOPR on-chain indicator determines whether bitcoin owners are making profits or losing money when selling their coins. If SOPR is greater than one, the asset is being sold for a profit. Otherwise, they are losing money.
With a reading below 1, BTC’s SOPR indicates depressing sentiment, although Kraken claims the indicator was bad last year when bitcoin fell from $65,000 in May to $30,000 in July.
The MVRV Z-score also shows that the outlook for Ethereum is bullish. The purpose of statistics is to determine whether an asset’s price is selling above or below its fair value, which is used to determine market profitability. A rating of more than 5 indicates that ETH has been overbought, or is selling for more than its value. A reading below one suggests that the cryptocurrency is oversold, or is trading at a discount to its true value.
The MVRV-Z score has fallen into the ‘oversold’ zone, with ETH down -49 percent from its all-time high of $4,867 on November 9, 2021. During the retracement, ETH’s MVRV Z-score slips to “oversold”. area, but it doesn’t stay there long before prices return.
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The last time Ethereum’s MVRV Z-score fell in this range was during the Black Thursday market crash in March 2020. Historical on-chain data suggests that not all is lost for ETH, despite the fact that asset prices and network activity are declining. Historically, market participants have created positions during ‘oversold’ MVRV Z-score levels.
At the time of writing, bitcoin is trading in the green with a gain of over 2% and is trading at $37,137. Ethereum, on the other hand, is also up a percentage point and is trading at $2475 in the last 24 hours.