This indicator at such a high value indicates that “almost everyone holding LINK is in profit,” which Santiment asserts is a “dangerous” trend.
Shortly after Santiment released this data, one of the company’s contemporaries, Glassnode, found that $15 million worth of LINK was sent to Binance in 5,000 different transactions. Some thought this was going to be a catalyst for a dump, but a retracement never really took place.
The issue with the MVRV indicator is that it assumes a large portion of investors eventually take profit on their trades. As is the case with Synthetix, Bitcoin, and other cryptocurrencies, there are often investors that are willing to hold their assets at all costs, rendering the MVRV indicator somewhat moot.
Luke has had a long interest in financial technology, especially cryptocurrency and blockchain. With a Bachelors degree in Journalism and Media, Luke is dedicating his writing skills for the digital currency sphere.He can be contacted at firstname.lastname@example.org