One of the key indicators used to determine whether Ethereum (ETH) is overvalued or not is its “volume” relative to Bitcoin (BTC) – although one analyst says the asset may not be still overbought.
Ki Young Joo, CEO of cryptocurrency analytics firm Cryptoquant, noted that while the market capitalization of Ethereum (MVRV) has grown rapidly, it has also been accompanied by a slight increase in trading volume and active addresses on the Ethereum network.
“ETH MVRV is rising faster than BTC MVRV, indicating that the ETH market is rising relative to its on-chain fundamentals,” Joe wrote in a June 19 post.
MVRV indicates when an asset is trading above or below its fair price, which is essentially the difference between the price users paid for the asset and the current market price.
Compared to Bitcoin over the past 30 days, Ethereum’s MVRV jumped 29.9% to 91.43%, while Bitcoin’s MVRV did the opposite, falling 10.8% to 127, 41% over the same period, according to Santiment data.
A high MVRV means that ether’s market cap is higher than its realized value, indicating that it is overvalued, which could raise fears of a potential sell-off in the future.
When it falls, it indicates that the market is calming down and the price may be getting closer to fair value.
However, Joo suggests that since Ethereum ETFs are expected to start trading soon, the high MVRV is unlikely to scare off investors.
“Given the current state of ETFs, this could be an ETH-only season,” Joe added, referring to the ETF trading schedule, which SEC Chairman Gary Gensler said would begin “sometime this summer,” while ETF analyst Eric Balchunas. suggested it could start as early as July 2.
Ether will reach $10,000 by the end of 2024: analyst
Cryptocurrency technical analyst Yoddha pseudonymously referred to the current Ether price situation on the chart, noting that there was a slight consolidation after the formation of a morning star – a signal of a bullish reversal from the bottom of a downtrend.
“Ethereum is holding price well and looks like it’s about to go crazy,” crypto technical analyst Yudha wrote on June 19.
“It will be over $10,000 before the end of the year. “Mark my words,” Yoda added.
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Ethereum is trading at $3,556 at press time, according to data from CoinMarketCap.
On June 18, it again surpassed the crucial $3,500 level, up 1.37%, after ConsenSys announced that the United States Securities and Exchange Commission (SEC) was ending its investigation to determine if Ethereum was considered a security.
Ethereum’s dominance in the cryptocurrency market is also seeing significant growth, increasing by 6.62% over the past seven days, according to TradingView data. Meanwhile, Bitcoin dominance decreased slightly by 0.23% during the same period.
At press time, Ethereum’s dominance was 18.8%, while Bitcoin’s dominance was 55.31%.
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This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research before making a decision.
