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On Monday, December 16, Ethereum (ETH) price surpassed $4,000 once again, and historical data suggests this comeback could be the start of a prolonged bull market. The development comes as some analysts speculate that ETH could follow in the footsteps of Bitcoin (BTC) after the currency hit a new historic high.
But can these optimistic predictions survive? This Blockchain Analysis will look at key historical data of Ethereum that has influenced its price dynamics.
Ethereum Investors Are Returning to “Trust” Mode
According to Glassnode, Ethereum’s return to $4,000 has improved the sentiment of Long-Term Holders (LTH) towards this cryptocurrency. In assessing the current perception surrounding ETH, TinTucBitcoin looked at the Long-Term Holder Unrealized Profit/Loss Index (LTH-NUPL).
The LTH-NUPL Index evaluates the behavior of investors who have held a cryptocurrency for more than 155 days. This gauge is divided into several sections: despair (red), hope (orange), optimism (yellow), trust (green), and excitement (blue).
Using Ethereum’s historical data, despair periods represent bearish markets, and in most cases, ETH prices did not register significant increases during this period. The phase between hope and optimism marks the exit from a bear market, while confidence dictates the early phase of a bull market. Finally, euphoria indicates when the cryptocurrency is nearing its cycle peak.
As seen above, Ethereum’s LTH-NUPL index is currently in the confidence zone, indicating that ETH price may have space for further growth. In previous cycles, Ethereum saw significant gains as it entered the euphoria zone. With ETH still in the confidence stage, the cryptocurrency could be on track to rise well beyond $4,000 in the coming weeks.
The Market Value to Realized Value Ratio (MVRV) is another metric that supports further price increases for ETH. This ratio evaluates whether a cryptocurrency is undervalued or overvalued by evaluating its market returns.
Typically, the higher the MVRV ratio, the greater the likelihood that Holder will sell. If low, it increases the chances of the user holding the cryptocurrency. According to Santiiment, Ethereum’s 30-day MVRV index is 8.73%, lower than the 22.61% rate it achieved in March.
This suggests that ETH remains close to its undervaluation and reinforces the idea of higher value in the coming weeks and months.
ETH Price Prediction: Time to Approach $5,000
Ethereum price continues to hold strong support around $3,075 on the daily chart, a level that has played a pivotal role in fueling the recent rally. ETH also broke above the $4,003 resistance level, pointing to continued bullish momentum.
The Bull Bear Power Index (BBP), which measures buying relative to selling, remains in the positive zone, reinforcing the uptrend.
If this trend continues, the dominance of buyers suggests that ETH price could climb towards $4,400. However, if the bear market regains control, ETH could reverse its gains and fall towards $3,578.
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