As Bitcoin sets a new all-time high and Ethereum approaches this record, analysis company Santiment examined the current state of the market.
Company analysts evaluated market sentiment and potential future movements by using on-chain and social metrics in a video they published.
According to Santiment's analysis, despite the price increase, Bitcoin's trading volume decreased after the peak in July. This situation is interpreted as a signal of a 'downward trending divergence' in the market. Similarly, declines are also observed in daily active addresses and network growth, raising questions about the sustainability of the price increase.
On the other hand, Santiment's MVRV (Market Value to Realized Value) analysis indicates a 'slight danger zone' for Bitcoin. The long-term MVRV being at 21% suggests that prices may come under some pressure. The situation is different for Ethereum. Ethereum's 90-day MVRV is at 40%, and the 365-day MVRV is at 57%. Analysts warn that these high values could pave the way for larger price drops.
Santiment data also reveals the behaviors of different investor groups in the market. Large investors, referred to as 'whales', who hold between 10 and 10,000 Bitcoins, have been continuously accumulating since March 22 and have not sold their assets even after the recent price record. This situation is considered a positive signal as it reflects the confidence of whales in the market and their long-term perspective. However, individual investors holding less than 0.1 Bitcoin are also moving towards buying. Analysts point out that simultaneous buying by both large and small investors usually indicates a need for a 'cooling off' in the market.
The increase in 'buying on dip' statements on social media following the recent price drop is generally considered a contrary indicator, giving the impression that there is some excessive optimism in the market. Analysts state that all these indicators suggest a euphoria in the market and that investors need to be cautious.
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