The ETH price gauge is ‘heating up’, but analysts say it is not overvalued
The key metric used to determine whether or not Ether (ETH) is overvalued has become “heated” relative to Bitcoin (BTC) – although one analyst argues that the asset may not yet be in overbought territory.
CryptoQuant CEO Ki Yang Joo has also brought Ethereum's market capitalization (MVRV) to rapidly growing trading volume and active addresses on the Ethereum network.
“ETH MVRV is increasing faster than BTC MVRV, when the ETH market warms up against the fundamentals of the chain,” Ju wrote in a June 19 X post.
MVRV indicates when an asset is trading above or below fair value, which is essentially the difference between what consumers paid for the asset and its current market value.
Compared to Bitcoin in the last 30 days, Ethereum MVRV jumped 29.9% to reach 91.43%, while Bitcoin MVRV went the other way, falling 10.8% to 127.41% in the same period, according to Santiment data.
A high MVRV means that the market value of Ether is higher than its realized value – it suggests that it is overvalued, which raises the risk of a possible sell-off in the future.
When it is rejected, it indicates that the market is slowing down, and the price may be approaching its true value.
However, Ju points out that where Ether ETFs are expected to trade soon, the high MVRV is unlikely to scare away investors.
“Given the current ETF situation, this is likely to be an ETH-only season,” Ju added, referring to the ETF trading period that SEC Chairman Gary Gensler reportedly said would begin “this summer,” while ETF analyst Eric Balchunas suggested it could start as early as July 2.
Ether will reach $10,000 by the end of 2024: analyst
Mysterious crypto technical analyst Yodada points to Ether's price position on the chart, noting that there is a slight consolidation following the formation of a morning star – a sign of a bullish reversal below the bottom.
“Ethereum has been increasing its value nicely and looks poised to do well,” wrote crypto technical analyst Yodada on June 19.
“It will be over $10,000 before the end of the year. Mark my words,” Yodada added.
Related: Ethereum (ETH) Price Fails to Rally on Good News – Here's Why
According to CoinMarketCap data, Ethereum is trading at $3,556 at the time of publication.
On June 18, the US Securities and Exchange Commission (SEC) pulled back above the crucial $3,500 mark, a 1.37% gain, following Consensys' announcement that the United States Securities and Exchange Commission (SEC) was ending its investigation into whether ETH qualifies as a safe haven.
According to TradingView data, Ethereum's dominance in the cryptocurrency market is growing significantly, increasing by 6.62% over the past seven days. Meanwhile, Bitcoin's dominance has declined slightly by 0.23% over the same period.
At the time of publication, Ethereum's dominance is 18.8%, while Bitcoin's is 55.31%.
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This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
