- Altcoins have observed a surge in their prices in the past four months, several key tokens are facing a risk of a correction.
- On-chain metric MVRV reveals a higher risk than average in buying Cardano, Chiliz, Ethereum, Fetch.AI, Lido, among other assets.
- AI and data coins could correct in the coming weeks as the hype surrounding the narrative declines.
Altcoin prices have climbed in the past four months, offering massive gains to holders beginning October 2023. Except for a few lagging altcoins, a vast majority of assets generated profits for average wallet holders in the mid to long term timescale.
Crypto intelligence tracker Santiment’s predictive model uses Market Value to Realized Value (MVRV) metric to determine whether an altcoin is in an opportunity or danger zone. The model identified several assets in the danger zone, most notable ones including Cardano, Ethereum, Lido and Fetch.AI, among others.
Also read: AIT, GRT, OCEAN: Crypto data coins see massive rally alongside Bitcoin and AI tokens
Altcoins in the danger zone: ADA, CHZ, ETH, ENS, FET, HNT, LDO
Santiment’s MVRV model places several altcoins in the danger zone. Santiment’s analysts believe that these assets are at a high risk of “correcting.” After four months of rallying higher, several assets have reached at a point where they typically correct, increasing the risk associated with opening a trade or a long position in these cryptocurrencies.
The notable cryptocurrencies that are currently in the MVRV danger zone include, Cardano (ADA), Chiliz (CHZ), Ethereum (ETH), Ethereum Name Service (ENS), Fetch.AI (FET), Holo (HNT), Lido (LDO), Nexo (NEXO), Ocean Protocol (OCEAN), Singularity NET (AGIX) and The Graph (GRT).
MVRV model by Santiment. Source: Santiment
The altcoins identified using the MVRV model are fairly “overbought,” while this does not mean that they are set to witness a massive correction, it means that there is a higher than average risk of purchasing these assets after a four-month rally in their prices.
AI hype could die down soon
The hype generated in Artificial Intelligence (AI) tokens with the launch of text to video generator tool Sora fueled gains in several assets like AGIX, FET, GRT. The hype could die down soon, if the narrative fails to gain traction, these cryptocurrencies could witness a correction. The launch of further tools from OpenAI or Sam Altman’s projects could see the “sell the news” effect at play as market participants anticipate a spike in AI token prices.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Crypto Today: Bitcoin is less than 10% away from all-time high as Ethereum ETF approval anticipation brews
Bitcoin trades around $68,000 early on Monday, less than 10% away from its all-time high of $73,777 on Binance. Ethereum ETF anticipation brews among traders and Ether investment products see inflow of over $45 million in the past week.
Ripple lawsuit settlement likely soon, says Brad Garlinghouse, XRP hovers around $0.60
Ripple (XRP) trades around a key psychological level of $0.60, early on Monday. The altcoin recently made headlines for its highest weekly gain of 2024, over 40%. XRP sustained nearly 21% of the gains from the last seven days.
Solana could cross $200 if these three conditions are met
Solana’s total value locked climbs 18% in July to $5.38 billion, as seen on DeFiLlama. Solana sustains over 20% gains in the past seven days, corrects nearly 3% on Monday. Active addresses and new address count in the Solana network have increased throughout July.
ALT, WLD, ENA, ID set for $200 million token unlocks next week
The crypto market is set to experience another wave of token unlocks next week, with Altlayer (ALT), Worldcoin (WLD), Ethena (ENA), and Space ID (ID) set for a combined token unlock worth about $200 million.
Bitcoin: Will BTC continue its bullish momentum?
Bitcoin (BTC) price increased by 5.5% this week until Friday after breaking above a descending trendline. Currently, it is trading slightly higher by 0.23% at $64,166.