Dogecoin (DOGE) MVRV Ratio Hits Oversold Territory, Signaling Potential Buy Zone

On-chain analytics firm Santiment has highlighted a “blood in the streets” moment in the crypto market, with several assets, including Dogecoin (DOGE), posting negative MVRV ratios.

According to Santiment's analysis, on-chain metrics currently indicate an environment where many crypto assets are trading in oversold territory. The firm's research highlights a series of negative MVRV (Market Value to Realized Value) ratios across the crypto landscape, encompassing BTC, ETH, ADA, and DOGE.

“When MVRV’s are negative, this means a buy or addition to your holding is doing so while others are already at a loss. Historically, these ‘blood in the streets’ moments are when professional traders make money,” Santiment writes.

The data published by Santiment includes the 30-day MVRV ratios for four major assets as of January 8. Bitcoin's MVRV ratio is at -3.73%, Ethereum's at -7.71%, Cardano's at -6.69% and Dogecoin's at -8.89%.

In simple terms, MVRV compares the total market capitalization of a cryptocurrency (its “Market Value”) with the total cost basis of holders (its “Realized Value”). A negative MVRV often indicates that the average holder is currently at a loss on their position.

For Dogecoin, the -8.89% MVRV ratio suggests that — on average — investors who acquired DOGE in the last 30 days are sitting on notable unrealized losses. This contrasts with BTC's less pronounced -3.73%, indicating that Dogecoin's short-term holders are, on average, deeper in the red relative to Bitcoin's.

While both ETH (-7.71%) and ADA (-6.69%) are also in negative MVRV territory, their holders are faring slightly better than DOGE's over the past month.

Given that DOGE's MVRV is the most negative among the four mentioned, there is potential for a stronger recovery bounce if market conditions stabilize. However, it also underscores higher risk if broader crypto sentiment remains fragile. As Santiment noted, traders often scan for negative MVRV as a potential opportunity to “buy low,” but this is by no means a guarantee of immediate upside.

Santiment's analysis also touches upon the macroeconomic forces that have been accelerating the crypto market's recent sell-off. On Tuesday, January 7, U.S. bond yields surged following surprisingly strong economic indicators, with the 10-year Treasury rising to 4.67%.

Much of the market anxiety centered on the higher-than-expected ISM Prices Paid Index, a measure that can foreshadow inflation, and a surprise uptick in the JOLTS job openings data. Faced with signs of labor market strength and possible inflation pressures, investors pivoted to risk-off strategies, hitting crypto assets across the board.

“Crypto markets sink further, indicating short to midterm buy zones for most assets,” reads Santiment's published chart. In this light, Dogecoin's current downturn aligns with the broader market narrative.

If yields and inflation concerns continue to dominate headlines, we can anticipate more cautious capital flows into risk assets. Conversely, any signal of cooling inflation or a less restrictive stance by the Federal Reserve could spur a rally — one that might be amplified by negative MVRV ratios across the board.

However, the contrasting signals make for a tricky trading environment. On one hand, Santiment's metrics point to advantageous historical conditions for those looking to accumulate, especially for DOGE at -8.89% MVRV. On the other, uncertain macro data — ranging from Treasury yields to inflation prints — could hamper any near-term recovery.

For now, Santiment's outlook is measured: “Do not assume these opportunity zone signals will lead to an immediate turnaround. But probabilities are pointing to at least a short to mid term turnaround for crypto shortly, assuming economic or geopolitical factors don’t get in the way.”

At press time, DOGE trades at $0.33.