A significant indicator used to assess whether Ether (ETH) is overvalued has been showing signs of increasing in comparison to Bitcoin (BTC) – although one analyst believes that the asset may not be in overbought territory just yet.
According to CryptoQuant CEO Ki Young Ju, Ethereum’s Market Value Realized Value (MVRV) is on the rise, accompanied by a surge in transaction volume and active addresses on the Ethereum network.
Ju pointed out in a post on June 19 that “ETH MVRV is rising faster than BTC MVRV, suggesting ETH market is heating up relative to its on-chain fundamentals.”
The MVRV metric indicates whether an asset is trading above or below its fair price, which represents the difference between the price users paid for the asset and the current market price.
Over the last 30 days, Ethereum’s MVRV has increased by 29.9% to reach 91.43%, while Bitcoin’s MVRV has decreased by 10.8% to hit 127.41% during the same period, as per data from Santiment.
A high MVRV suggests that the market value of Ether is higher than its realized value, indicating that it may be overvalued and could potentially lead to a sell-off in the future. Conversely, a decline in MVRV indicates that the market is cooling off and the price may be approaching its fair value.
Despite the high MVRV, Ju believes that with the imminent trading of spot Ether ETFs, investors are unlikely to be deterred. He mentioned, “Given the current ETF situation, this might be an ETH-only season,” referring to the anticipated timeline for ETF trading as mentioned by SEC Chair Gary Gensler and ETF analyst Eric Balchunas.
In other news, a crypto technical analyst known as Yoddha predicted that Ether will surpass $10,000 by the end of 2024, citing a bullish reversal signal on the price chart following a period of consolidation after a morning star formation.
As of the time of publication, Ethereum is trading at $3,556, showing a 14.81% increase over the past 30 days. On June 18, it rose above the crucial $3,500 mark following Consensys’ announcement that the SEC has concluded its investigation into ETH’s security status.
Ethereum’s dominance in the cryptocurrency market is steadily increasing, up by 6.62% over the past seven days, while Bitcoin’s dominance has slightly decreased by 0.23% during the same period.
At present, Ethereum’s dominance stands at 18.8%, with Bitcoin’s at 55.31%.
Please note that this article does not offer any investment advice or recommendations. All investment and trading decisions involve risks, and readers should conduct their own research before making any decisions.