Online analytics firm Santiment noted that XRP and Ethereum are among the coins in the “undervalued” zone of the MVRV ratio.

The 30-day MVRV is negative for XRP and Ethereum

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MVRV is a popular metric that tells us how a given digital asset’s market capitalization compares to its realized capitalization. The latter is an on-chain capitalization model that calculates the total value of an asset by assuming that the value of each individual token is equal to the spot price at which it was last traded on the network.

In brief, a realized cap represents the total amount of capital that cryptocurrency investors have put into it. In contrast, elementary market capitalization is simply the value that holders carry in the present. Since the MVRV ratio takes into account the ratio of these two values, it essentially provides insight into the profitability of investors as a whole. In the context of the current topic, what is captivating is the MVRV indicator of only a specific segment of traders: those who made a purchase in the last month.

Below is a chart of this version of the MVRV ratio provided by Santiment, which shows its trend across the top five coins: Bitcoin, Ethereum, XRP, Cardano, and Chainlink.

As you can see from the chart, the 30-day MVRV has recently fallen into the negative territory for all five cryptocurrencies, indicating that monthly buyer returns have fallen into the red.

When this situation occurs, the analyst firm considers the asset to be “undervalued.” “A coin having a negative percentage means that the average investors you are competing with have less money and there is an opportunity to enter the market when returns are below normal ‘zero-sum game’ levels,” Santiment explained.

However, not all chips with a negative value on the indicator provide equal opportunities. “The lower a coin’s 30-day MVRV, the less risk there is in opening or increasing a position,” the analyst firm noted.

Up to -5% Santiment defines cryptocurrencies as being in the “slightly undervalued” zone. Bitcoin has a 30-day MVRV of 3.7%, so it falls in this area. Meanwhile, XRP and Ethereum have rates of -5.7% and -7.6%, which puts them in a stronger undervalued region. Of the tokens on the chart, 30-day Chainlink buyers are currently seeing the most issues with losses at 9.5%.

XRP price

XRP fell to a low of $1.8 on Sunday, but the asset has since rebounded above $1.9.