Ethereum’s price has been on a wild ride lately, mirroring Bitcoin’s ups and downs. After a bumpy start to the week, ETH shot up by 10% in just 24 hours! This rebound comes after a market correction that had investors worried. While Ethereum’s price is still tied to Bitcoin’s, some interesting data suggests a potential shift.
Is Ethereum Undervalued? The MVRV Ratio Says Maybe
A CryptoQuant analyst, Mac, points to Ethereum’s Market Value to Realized Value (MVRV) ratio as a key indicator. This ratio suggests Ethereum might be undervalued right now. The data shows big investors are buying up more ETH, which could be a sign of support at current prices.
Mac explains that the MVRV ratio has dipped below 1. Historically, this means the asset is trading near the average price all holders paid for it. In the past, when Ethereum’s MVRV went below 1, prices bounced back nicely.
Whale Watching: Institutional Accumulation
There’s more evidence suggesting a potential price increase. The number of “accumulation addresses” – wallets receiving ETH but not selling – is rising. This means large investors and institutions are quietly adding to their ETH holdings, especially around the $2,200-$2,300 price range. This price range is where many large investors originally bought their ETH, making it a strong support level.
The Bigger Picture: Macroeconomics and Long-Term Outlook
While the accumulation trend is positive, we can’t ignore the broader economic picture. Mac notes that US economic policies, particularly monetary policy and inflation, could still impact crypto prices. Stricter monetary policies could lead to sharp price drops.
However, Mac remains optimistic about Ethereum’s long-term prospects. It’s still the second-largest cryptocurrency, with a robust and mature DeFi ecosystem. This makes it attractive to institutional investors, who are likely to continue buying while it’s considered undervalued. The long-term outlook for Ethereum, therefore, looks good.
