Ethereum ($ETH) hitting $3,600 has sparked optimism among altcoin investors, with this breakout signaling potential for a broader altcoin rally. After being relatively weak compared to Bitcoin in recent months, Ethereum has now surged past $3,500, igniting sharp increases across cryptocurrencies in the Ethereum ecosystem. This price movement is particularly noteworthy as it comes amid positive technical indicators, suggesting that Ethereum may still have room for growth.
One of the key metrics used to analyze Ethereum’s market performance is the Market Value - Realized Value (MVRV) ratio, which compares the market value of Ethereum to its realized value. A rising MVRV ratio indicates that more investors are in profit, though excessively high levels suggest that Ethereum may be overvalued, increasing the risk of a price correction. Currently, Ethereum's 30-day MVRV ratio is at 11.89%, which is below the typical local peak range of 18-22%. This suggests that Ethereum is not yet overvalued and could have further upside potential before reaching a correction zone.
Additionally, Ethereum’s Average Investment Age (MDIA), which measures the average age of coins on the network weighted by their purchase price, is trending downward. A falling MDIA suggests that previously dormant coins are becoming active, signaling increasing market participation and trading activity. This could be a positive sign, as higher activity often precedes a price rally.
With both the MVRV ratio and MDIA indicating favorable conditions, Ethereum’s momentum looks promising, and the potential for continued growth remains high. Investors should monitor these metrics closely to gauge market sentiment and anticipate any potential shifts in the price trend.