Blockchain analytics firm Santiment has warned investors that Ethereum (ETH) is at risk of further declines based on a key metric.
In a recent article, the market intelligence firm has determined that the second-largest cryptocurrency by market cap is now in a “danger zone,” based on the metric Realized Value by Market Value (MVRV) of ETH over a seven-day period. says it is.
The MVRV of an asset is determined by dividing its market value by its actual value. A high MVRV value indicates a high level of unrealized profits and therefore the risk of investors liquidating their assets for profit.
On the other hand, a low MVRV indicates low unrealized profits, which can be an indication that an asset is undervalued or suffering from low demand. According to Santiment, the drop in Ethereum price and MVRV could be healthy for the second largest crypto asset.
Santiment also warns that Ethereum’s price action is giving bearish signals and says the bulls must rise to avoid a potential sell-off event.