Key Points
- Ethereum’s Market Value to Realized Value (MVRV) ratio has reached its highest level since April 2022.
- The MVRV ratio suggests that Ethereum’s current market value is significantly higher than the price at which most investors acquired their holdings.
Ethereum’s [ETH] Market Value to Realized Value (MVRV) ratio is now above 100%, marking its highest level since April 2022, according to data from Santiment.
Understanding the MVRV Ratio
The MVRV ratio is a tool that assesses whether an asset is overvalued or undervalued. It does this by comparing the current market value of an asset to the average price at which all units were last moved on the blockchain.
An increasing MVRV ratio suggests that the current market value of an asset is significantly higher than the price at which most investors acquired their holdings.
As of writing, Ethereum’s MVRV ratio was 103.11%. This figure represents a 145% increase since January 25th. This increase coincides with a recent surge in Ethereum’s price, which recently surpassed the $3,400 mark, according to data from CoinMarketCap.
Implications of the High MVRV Ratio
With an MVRV ratio of 103%, Ethereum’s current market price is 1.03 times higher than the average price at which all Ethereum units were last moved on the blockchain. This suggests that most coin holders would realize at least 100% profit on their investments if they sold now.
Despite the potential for price swings, as indicated by Ethereum’s Bollinger Bands, other key indicators show that bullish sentiments exceed bearish activity.
The coin’s Awesome Oscillator returned green upward-facing bars at the time of writing. This indicator measures market momentum by comparing its short-term and long-term moving averages. When it returns only green bars, it indicates that the bullish sentiment is strong and gaining momentum.
Furthermore, the coin’s Moving Average Convergence/Divergence (MACD) line rested solidly above the trend and the zero lines. This suggests that bullish momentum is prevailing in the market.
On Ethereum’s derivatives market, futures open interest totaled $11.38 billion. The last time Ethereum’s futures open interest was this high was in December 2021, according to data from Coinglass. With the growth in the coin’s positive funding rates across exchanges, futures traders continue to place bets in favor of a price rally.
