Dogecoin is in the 'Bloody Street' Moment: Buy or Sell Right Now?

Dogecoin (DOGE) once again falls into the sights of market observers, with the ‘blood on the streets’ moment appearing according to data from the Santiment chain analysis company. The latest research from the company, shared on January 8 via X, highlights a series of negative MVRV (Market Value to Realized Value) ratios across the entire cryptocurrency landscape—including Bitcoin (BTC), Ethereum (ETH), Cardano (ADA), and Dogecoin. Santiment declares: “The average trading profit is an excellent representation of whether ‘buying at low prices’ or ‘selling at high prices’ is really a suitable time”, emphasizing that the current figures on the chain indicate an environment where many cryptocurrencies are in the oversold zone. “When MVRV is negative, it means that buying or adding to your investment portfolio is taking place while others have suffered losses. Traditionally, these ‘blood on the streets’ moments are when professional traders make money,” Samtiment wrote. Santiment’s published data includes the 30-day MVRV ratio for four major assets as of January 8. The MVRV ratio for Bitcoin is -3.73%, Ethereum is -7.71%, Cardano is -6.69%, and Dogecoin is -8.89%.

Simply put, MVRV compares the total market capitalization of a cryptocurrency (its market value) to the total cost basis of the holders (its realized value). A negative MVRV often indicates that the average holders are currently below their position. For Dogecoin, the MVRV ratio of -8.89% indicates that, on average, investors who have bought DOGE in the past 30 days are experiencing significant unrealized losses. This contrasts with the slightly less apparent -3.73% level of BTC, indicating that short-term Dogecoin holders are deeper in the red compared to Bitcoin. Ethereum (-7.71%) and Cardano (-6.69%) are also facing negative territories, but their holders are performing slightly better than Dogecoin in the past month. Because DOGE’s MVRV is the most negative among the four mentioned indicators, it may have a stronger recovery potential if market conditions stabilize. However, it also highlights higher risks if the overall cryptocurrency sentiment remains fragile. As Santiment has noted, traders often scan negative MVRV as a potential opportunity to “buy low”, but this does not guarantee an immediate price increase. Buy or sell Dogecoin now? Santiment’s analysis emphasizes how macroeconomic forces have accelerated the recent sell-off in the cryptocurrency market. On Tuesday, January 7, U.S. bond yields surged following unexpectedly strong economic indicators, with the 10-year Treasury yield rising to 4.67%. Most market concerns are focused on ISM’s higher-than-expected Purchasing Managers’ Index, which may indicate an impending inflation, as well as the unexpected surge in JOLTS employment data. With signs of a tightening labor market and the potential for inflationary pressures, investors have shifted to risk-averse strategies, affecting cryptocurrencies broadly. “The cryptocurrency market continues to decline, indicating short- to medium-term buying zones for most assets,” Santiment’s published chart said. In this direction, the current downturn of Dogecoin is in line with the overall market movement. If yields and concerns about inflation continue to dominate the headlines, we can anticipate more cautious capital flows into risky assets. Conversely, any signal of cooling inflation or a less restrictive stance by the Federal Reserve could prompt a price rally—one that could be amplified by broad-based negative MVRV rates. However, the contrasting signals create a challenging trading environment. On the one hand, Santiment’s data points to favorable historical conditions for accumulation, especially for DOGE at -8.89% MVRV. On the other hand, macroeconomic data, from bond yields to inflation data, is uncertain and may hinder any short-term recovery. Currently, Santiment’s prospects are measured: “Don’t assume that these opportunity zone signals will lead to immediate change. But there is likely to be at least short to medium-term changes for cryptocurrencies in the short term, assuming economic or geopolitical factors do not hinder.” At the time of the media report, DOGE was trading at $0.33.