A key indicator shared by crypto analytics firm Santiment suggests that two metaverse-focused altcoins, Decentraland ($MANA) and The Sandbox ($SAND) are currently “still undervalued.”
In a tweet shared on the firm’s microblogging platform to its more than 150,000 subscribers, ApeCoin ($APE) still has a 1-year MVRV index of 16%, while $MANA and $SAND have a much lower figure of -60% and -33%. He said he was “still undervalued” despite the recent price spikes in the cryptocurrency space.
The MVRV ratio compares the total market value of a crypto-asset with its actual market value to assess whether its price is over- or undervalued. A high value indicates potential selling pressure as owners can make a profit, while a negative value indicates a lower risk of selling pressure.
The indicator has been used to accurately predict BTC bear market bottoms. According to analyst Ali Martinez, the MVRV index, calculated as Bitcoin’s Market Cap divided by Realized Value, fell to -56.85% in 2015, “marking the end of the bear market.” In December 2018, the price of Bitcoin fell to -55.62% after falling from close to $20,000 to just over $3,000.
According to Santiment, the MVRV index increases as “as potential profits increase, more people will be willing to sell it” and “give an idea of how overvalued or undervalued an asset is.” According to the firm, if the MVRV is 100%, all holders will make 100% profit if they sell their coins at current prices. At the other extreme, it shows how undervalued an asset is on average.
According to CryptoCompare data, $SAND price has increased by over 56% in the last 30 days, while $MANA price has increased by more than 100% in the same period. These price spikes come amid a broader cryptocurrency market recovery that has seen the price of the flagship cryptocurrency soar to $21,000 and the space’s total market capitalization approaching $1 trillion.