On Monday (16), the price of Ethereum (ETH) rose above $4,000 again, with historical data suggesting that this return could be the start of a prolonged bull cycle. This development comes as several analysts opine that ETH could follow in the footsteps of Bitcoin (BTC) after the latter reached another all-time high.
But will these bullish predictions hold up? This on-chain analysis examines key historical ETH data that has influenced its price action.
Ethereum Investors Are Back in “Belief” Mode
According to Glassnode, Ethereum’s return to $4,000 has improved Long-Term Holder (LTH) sentiment towards the cryptocurrency. To understand the current perception around the asset, BeInCrypto evaluated the Long-Term Holder-Net Unrealized Profit/Loss (LTH-NUPL).
LTH-NUPL measures the behavior of investors who have held a cryptocurrency for more than 155 days. This metric is divided into several parts: capitulation (red), hope (orange), optimism (yellow), belief (green), and euphoria (blue).
Using historical data, capitulation represents a bear market, and in most cases, the price of ETH does not register a notable increase during this period. The phase between hope and optimism, on the other hand, highlights a period of exit from the bear market, while belief indicates the initial phase of the bull market. Finally, euphoria indicates when the cryptocurrency is close to the top of the cycle.
Ethereum Long Term Holder NUPL. Source: Glassnode
As seen above, Ethereum's LTH-NUPL is currently in the belief region, indicating that the price may have more room to grow. In past cycles, Ethereum has made substantial gains as it enters the euphoria zone. With the asset still in the belief phase, the cryptocurrency could be on track to rise well beyond $4,000 in the coming weeks.
Market Value to Realized Value (MVRV) is another metric that supports further price growth for ETH. This ratio assesses whether a cryptocurrency is undervalued or overvalued by evaluating its market profitability.
Typically, the higher the MVRV, the more likely holders are to sell. If you are short, you increase the chances of HODLing. According to Santiment, Ethereum's 30-day MVRV is 8.73%, which is lower than the 22.61% achieved in March.
Rácio Market Value to Realized Value do Ethereum. Fonte: Santiment
This indicates that ETH is still close to being undervalued and reinforces the idea of a higher value in the coming weeks and months.
Price Prediction: Time to Approach $5K?
Ethereum price continues to hold strong support around $3,075 on the daily chart, a level that played a crucial role in driving the recent rally. ETH also broke above the $4,003 resistance, indicating continued bullish momentum.
The Bull Bear Power (BBP) indicator, which measures the strength of buyers against sellers, remains in positive territory, reinforcing the uptrend.
Ethereum Daily Analysis. Source: TradingView
If the trend holds, this dominance of the bulls suggests that the price could rally towards $4,400. However, if the bears regain control, ETH could reverse its gains and drop towards the $3,578 level.
The article Ethereum (ETH) Surpasses $4,000: Will the Price Continue to Rise? was first published on BeInCrypto.
