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According to data from Glassnode, Ethereum Realized Cap, which experienced a sharp decline from August to November, has now reached an all-time high at $243.45 billion. This development took place as the price of ETH escalated to $3,800.
Based on historical data, an increase in Realized Cap is a sign of a bullish trend. Therefore, this milestone could spell trouble for traders who are pessimistic about Ethereum’s price movements.
Ethereum Still Undervalued As It Hits Latest Milestone
Ethereum’s Realized Cap — a key metric in Blockchain — has shown a significant increase, suggesting the possibility of significant price increases. This index, which looks at the price each coin last moved, helps determine market tops and bottoms.
An increase in Realized Cap shows that coins that last moved lower are being spent, hinting that ETH is being revalued higher. Conversely, a decrease in Realized Cap reflects spending at higher prices, signaling a potential decline.
Therefore, the increase in Ethereum’s Realized Cap indicates growing confidence in the holding community and a repricing of ETH value. Furthermore, if this trend continues, it will be consistent with historical patterns prior to significant price increases.
Besides the above index, Ethereum’s Market Value to Realized Value (MVRV) Long/Short Difference also fits this argument. As the name suggests, the MVRV Long/Short Difference shows whether long-term holders have more unrealized gains at present value or short-term holders do.
When this index is negative, it means that short-term Holders have the advantage. In most cases, this is bad for the price. However, according to Santiment, Ethereum’s MVRV Long/Short Difference has climbed into positive territory at 5.67%, indicating that the trend is bullish and the Cryptocurrency is undervalued.
The last time Cryptocurrency followed this trend, ETH pessimists suffered a lot as the price skyrocketed to $4,100. As such, if this movement continues, Ethereum value could move higher in the short term.
ETH Price Forecast: 4,200 USD Is Near
An analysis of ETH/USD’s daily chart shows that the Cryptocurrency is following a similar trend, taking it to its yearly peak in June. During that period, Ethereum price initially dropped from $2,770 to to 2,200 USD before climbing above 4,000 USD after a few months.
From October to the first week of November, ETH dropped from $2,700 to $2,300 before recovering recently. The Relative Strength Index (RSI), which measures momentum, follows the same pattern.
If this trend continues, ETH could rise to $4,200 in the short term. If investors continue this move, the Cryptocurrency could climb as high as $4,500.
However, if Ethereum’s Realized Cap falls and buying pressure cools, this trend could change, and the price could slide below $3,500.
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