A Santiment analyst analyzed popular altcoins XRP (XRP) and Dogecoin (DOGE). The analysis may indicate that altcoins are waking up and starting to move.
To conduct the research, the Santiment analyst used the MDIA indicator, which tracks the average age of all Blockchain assets weighted by the purchase price, or simply the average age of an asset investment.
The MDIA indicator works extremely simply. Accordingly, if the value of the asset increases, it means that the asset does not move and becomes more and more immobile. Often this causes a coin's price to stagnate because the larger the number and age of non-moving coins, the less its price can rise. This indicates possible positive price action in the short term.
Until this week, XRP's MDIA had been rising steadily for three months when 2021 saw a sharp drop of more than 10 percent, the biggest drop since December. Then in December, the XRP price reacted higher with a 19 percent recovery over the week. The current drop in MDIA is linked to recent warnings of suspicious activity surrounding XRP.
The situation similar to the situation of XRP is also valid for Dogecoin (DOGE), whose MDIA value has fallen by more than 21.6% in the last three days. The analyst stated that the decline may continue, and DOGE should be followed carefully given the continued rise in the price of the altcoin.
According to many experts, the MDIA is a truly impressive metric, but all that is known is that the cryptocurrency markets are an unpredictable place. Therefore, relying on a single metric for prices can be misleading. In any case, it is better for traders to make logical trades on their own, but it can also be useful to consider the data provided by such metrics.