Ethereum (ETH) might be a steal right now, according to a key market indicator. Let’s dive into why.
Is ETH Undervalued?
A metric called the MVRV-Z score suggests ETH is undervalued. This score helps figure out if an asset is overpriced or underpriced. It’s currently at its lowest point in 17 months! The last time it was this low (October 2023), ETH went on a 160% rocket ride.
What’s the MVRV-Z score all about? It compares ETH’s market value to its actual value. A low score often means a potential bottom is near, while a high score hints at a possible peak. Besides October 2023, this score has been low twice before – in December 2022 and March 2020 – both times leading to bullish periods for ETH.
Whales Are Accumulating
Smart money is moving. Data shows that big ETH holders (“whales”) are quietly buying up ETH at a crazy rate – the highest in years! This suggests they expect a price surge. Some analyses even predict ETH could hit $9,000 this year. Whales holding between 1,000 and 10,000 ETH have been particularly active since July 2024, which coincided with the SEC approving the first spot ETH ETF.
Other Bullish Signals
The MVRV-Z score and whale activity aren’t the only positive signs. ETH’s weekly Relative Strength Index (RSI) recently hit a three-year low, often a sign of an upcoming rally.
Potential Roadblocks
However, there are some potential downsides. A growing amount of ETH held on exchanges could slow things down. Also, the Ethereum Foundation’s ongoing ETH sales might be keeping the price down.
The Bottom Line
Currently, ETH is trading around $2,268, up slightly in the last 24 hours. While the future is never certain, several indicators suggest ETH could be poised for a significant price increase. But remember, the crypto market is notoriously volatile, so proceed with caution!
