Author: Ciaran Lyons, CoinTelegraph; Translated by: Wuzhu, Golden Finance
A key metric used to determine whether Ethereum is overvalued has been “heating up” relative to Bitcoin — although one analyst believes the asset may not yet have entered overbought territory.
Ki Young Ju, CEO of cryptocurrency analytics firm CryptoQuant, noted that while Ethereum’s market value realized (MVRV) is rising rapidly, so too are the transaction volume and active addresses on the Ethereum network.
“ETH MVRV is rising faster than BTC MVRV, suggesting that ETH markets are heating up relative to its on-chain fundamentals,” Ju wrote in a June 19 X post.
MVRV indicates whether an asset is trading above or below its fair price, which is essentially the difference between what a user paid for an asset and the current market price.
According to data from Santiment, Ethereum’s MVRV has risen 29.9% to 91.43% compared to Bitcoin over the past 30 days, while Bitcoin’s MVRV has gone the other way, falling 10.8% to 127.41% over the same period.
Ethereum MVRV ratio chart. Source: Santiment
A high MVRV means that Ethereum’s market value is higher than its actual value — indicating that it is overvalued, which could raise concerns about a potential future sell-off.
When it falls, it indicates that the market is cooling down and prices may be approaching their fair value.
However, Ju said that with a spot Ethereum ETF expected to begin trading soon, the high MVRV is unlikely to scare off investors.
“Given the current ETF situation, this may be an ETH-only season,” Ju added, referring to the timeline for ETF trading, which has seen SEC Chairman Gary Gensler reportedly say will begin “this summer,” while ETF analyst Eric Balchunas said it could start as early as July 2.
Analyst: Ethereum price will rise to $10,000 by the end of 2024
Anonymous crypto analyst Yoddha pointed out Ethereum’s current price position on the chart and noted that there has been a slight consolidation — a sign of a bullish reversal from the bottom of the downtrend.
“The price of Ethereum has held up pretty well and looks ready for a crazy rally,” Yoddha, an anonymous crypto analyst, wrote on June 19.
“Ethereum will be worth over $10,000 before the end of the year. Mark my words,” Yoddha added.
As of the time of publishing, Ethereum is trading at $3,556, according to CoinMarketCap.
Ethereum is up 14.81% in the past 30 days. Source: CoinMarketCap
Ethereum climbed back above the key $3,500 mark on June 18, up 1.37% after Consensys announced that the U.S. Securities and Exchange Commission (SEC) had concluded its investigation into whether ETH qualifies as a security.
Ethereum’s dominance of the cryptocurrency market has also grown significantly, rising 6.62% over the past seven days, according to TradingView. Meanwhile, Bitcoin’s dominance has declined slightly over the same period, at 0.23%.
As of the time of publication, Ethereum’s dominance is 18.8%, while Bitcoin’s dominance is 55.31%.