Dogecoin (DOGE) is once again in the spotlight of market watchers, with a moment of 'blood on the street' appearing according to data from the chain analysis company Santiment. The company's latest research, 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 states: 'Average trading profit is a great representation of whether 'buying low' or 'selling high' is truly the right time,' while highlighting that current on-chain metrics indicate an environment where many cryptocurrencies are in oversold territory.

'When MVRV is negative, it means that buying or adding to your portfolio is happening while others are at a loss. Traditionally, these 'blood on the street' moments are when professional traders make money,' Santiment 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%.

In simple terms, MVRV compares the total market capitalization of a cryptocurrency (its market value) to the total cost basis of its holders (its realized value). A negative MVRV typically indicates that the average holder is currently below their position.

For Dogecoin, the MVRV ratio of -8.89% indicates that—on average—investors who bought DOGE in the last 30 days are facing significant unrealized losses. This contrasts with the less pronounced -3.73% of BTC, indicating that short-term Dogecoin holders, on average, are sinking deeper into the red compared to Bitcoin. Ethereum (-7.71%) and Cardano (-6.69%) are also facing negative territory, but their holders are faring slightly better than Dogecoin over the past month.

Since DOGE's MVRV is the most negative among the four mentioned metrics, there is a potential for a stronger recovery if market conditions stabilize. However, it also highlights the higher risks if general cryptocurrency sentiment remains fragile. As Santiment noted, traders often view negative MVRV as a potential opportunity to 'buy low,' but this does not guarantee an immediate price increase.

Buy or sell Dogecoin right now?

Santiment's analysis further emphasizes how macroeconomic forces have accelerated the recent sell-off in the cryptocurrency market. On Tuesday, January 7, U.S. bond yields surged after unexpectedly strong economic indicators, with the 10-year Treasury rising to 4.67%.

Much of the market's anxiety centers around the ISM price index coming in higher than expected, a metric that could signal inflation, as well as a surprising increase in JOLTS job data. With signs of tightening labor markets and potential inflationary pressures, investors have turned to risk-averse strategies, affecting cryptocurrency assets broadly.

'The cryptocurrency market continues to decline, indicating short to medium-term buying zones for most assets,' the chart published by Santiment states. In this direction, Dogecoin's current downturn aligns with the overall market trend. If yields and inflation fears continue to dominate headlines, we may expect more cautious capital flows into risk assets. Conversely, any signals of inflation cooling or a less restrictive stance from the Federal Reserve could trigger a rally—a rally that could be amplified by broadly negative MVRV ratios.

However, contrasting signals create a challenging trading environment. On one hand, Santiment's metrics indicate historically favorable conditions for those looking to accumulate, especially for DOGE at -8.89% MVRV. On the other hand, uncertain macro data—from Treasury yields to inflation data—could hinder any short-term recovery.

Currently, Santiment's outlook is measured: 'Do not assume that these opportunity zone signals will lead to an immediate change. But the likelihood is at least that there will be a change in the short to medium term for cryptocurrencies in the near term, assuming economic or geopolitical factors do not hinder.'

At the time of the press report, DOGE was trading at $0.33.