Altcoin Holders Sitting on Massive Unrealized Gains: Santiment Data

• Santiment data shows that the average altcoin wallet has witnessed massive profits.
• Santiment cautioned investors regarding “overbought” signals. 
• Opening a new position in an altcoin is highly risky, Santiment said.

Santiment, a blockchain analytics firm, has pointed out in a recent X post that altcoin holders are sitting on massive unrealized gains after weeks of explosive price action to the upside for many cryptos.  

Apart from a few sluggish altcoins, the “vast majority” of crypto projects have provided significant gains to holders, stated Santiment in a post on social media platform X (previously known as Twitter) on February 20. 

The average wallet over a medium to long-term time period has seen “understandably high profits” from altcoins since the market turned green starting in mid-October 2023. However, the blockchain analytics platform also cautioned investors that its signals are now showing “overbought” levels. 

Santiment also suggested that based on the market value to realized value (MVRV) metric, opening new positions in altcoins that are in the midst of a 4+ month rally is a high risk move. 

This certainly doesn’t mean that cryptocurrency is on the verge of a massive correction. But based on history, the highly reputable MVRV metric is revealing there is a higher risk than average in buying or opening new positions while markets are in the midst of a 4+ month surge,” Santiment said.

MVRV is the ratio of the total market cap divided by the realized cap of an asset. It is helpful in figuring out the local tops and bottoms of the price action of an asset. On the other hand, Santiment also stated earlier in January that most altcoins depend on the stability of Bitcoin’s price to thrive. As per CoinMarketCap data, Ether (ETH) witnessed a 10.54% surge in price, while Cardano (ADA) shot up by 13.59% in the past seven days. Polygon (MATIC) also rose 13% in the same duration.