Recently, Ethereum (ETH) has shown signs of falling below $3K, but it remains steady as investors confidently defend the altcoin.
Currently trading at $3,480, let’s see what could happen next for ETH.
Ethereum Still Has Much Growth Potential
One metric that has always proven reliable in Ethereum analysis is the Market Value to Realized Value (MVRV) ratio, a tool to gauge holder profitability and identify potential tops or bottoms. market capacity. The MVRV ratio compares a cryptocurrency’s market value to its realized value, providing insight into whether the asset is over- or undervalued.
When the MVRV ratio increases, it shows that more holders are in profit. However, if it climbs to extreme highs, it suggests the asset may be overvalued, increasing the risk of a price correction. Conversely, when the MVRV ratio decreases, it indicates a decline in profits.
If this ratio reaches extremely low levels, it is a signal for undervaluation, which could create attractive accumulation opportunities for investors. For ETH, the 30-day MVRV rate has increased to 11.89%. However, this ratio is not close to the local peak, which is usually around 18% and 22%. Therefore, this development suggests that Ethereum price.
Going beyond the MVRV ratio, the Median USD Investment Age (MDIA) also shows that Ethereum can avoid further price declines. MDIA evaluates the average age of all coins on the blockchain, calculated by their purchase price.
A rising MDIA shows that currencies are becoming less mobile, reducing the likelihood of a significant price rally.
Conversely, a falling MDIA shows that previously inactive coins are moving, signaling growth in trading activity, which is true for ETH. If this trend continues, it could boost Ethereum’s chances of having a bull run.
ETH Price Forecast: $4K May Be Approaching
On the daily chart, Ethereum price has formed an inverse head and shoulders pattern. This pattern often appears after a long string of price declines, marking a potential seller’s point of exhaustion.
This pattern consists of three main parts: the left shoulder, which represents the first uptrend; top, represents the end of the downtrend; and right shoulder, indicating recovery.
With ETH in an uptrend, the cryptocurrency is likely to rise to nearly $4k in the short term. Conversely, if selling pressure increases, this could change, and ETH could drop to $3,206.