MVRV Ratio Analysis Reveals Divergent Valuations: XRP and ADA Present Buying Opportunities While BTC and ETH Face Correction Risks

Santiment’s latest valuation assessment using the Market Value to Realized Value (MVRV) ratio reveals a stark divergence in how major cryptocurrencies are currently priced relative to their realized value—a key metric for identifying potential entry and exit points in the market.

The Undervalued Opportunities

XRP and Cardano (ADA) emerge as the most compelling cases for investors seeking lower-risk entry positions. XRP trades with a negative MVRV ratio of -6.1%, while ADA sits at -4.4%, both indicating that current market prices are substantially below what holders paid on average. This pricing disconnect creates asymmetric opportunities for swing traders, as mean reversion dynamics typically favor positions established at these discount levels.

At current valuations, XRP trades at $2.13 with a market cap of $129.24B, while ADA is positioned at $0.40 with a $14.79B market cap. These depressed valuations suggest limited downside risk relative to recovery potential.

The Overvaluation Warning

In sharp contrast, Bitcoin (BTC) and Ethereum (ETH) exhibit positive MVRV ratios, signaling that their current market prices exceed the average cost basis of current holders. BTC trades near $92.84K with a commanding $1.854T market cap, while ETH sits at $3.15K and $380.47B market cap.

The eth to btc ratio dynamic compounds this concern—as Ethereum significantly underperforms Bitcoin on a relative basis, ETH holders face compounded correction pressure. Both assets risk pullbacks as holders sitting at underwater positions become fewer, reducing the psychological support typically present at lower price levels.

The Neutral Position

Chainlink (LINK) occupies middle ground at $13.53, maintaining a neutral MVRV positioning that offers neither compelling entry signals nor immediate exit warnings. Its $9.58B market cap reflects a balanced valuation relative to holder cost basis.

Key Takeaway for Traders

Santiment’s analysis underscores a fundamental principle: negative MVRV ratios carry reduced risk profiles for tactical trading strategies. Assets trading below realized value benefit from mathematical mean-reversion dynamics. Conversely, the positive ratios on BTC and ETH warrant caution—particularly given the bitcoin dominance narrative potentially pressuring alts like Ethereum in the medium term.