Ethereum (ETH) is currently showing signs of being undervalued, according to a key on-chain indicator. The MVRV-Z score for ETH, which helps determine if an asset is overvalued or undervalued, is at its lowest level in 17 months. This suggests that ETH may be approaching a local bottom and could be primed for a significant rally.
In fact, the last time ETH was this undervalued was in October 2023, after which it experienced a 160% surge in price. The MVRV-Z score compares an asset’s market value to its realized value, indicating potential overbought or oversold conditions. A low score like the one ETH is currently experiencing often precedes a bullish phase.
Not only is the MVRV-Z score signaling a potential uptrend for ETH, but on-chain analytics also reveal that crypto whales are accumulating ETH at a rapid pace. Data from CryptoQuant shows that ETH inflows into accumulation addresses have reached multi-year highs, surpassing levels seen before previous bull runs. This accumulation by institutional investors and large holders suggests a strong belief in ETH’s future price increase.
Additionally, ETH whales, defined as wallet addresses holding between 1,000 and 10,000 ETH, have been aggressively accumulating since July 2024. This accumulation coincided with the approval of the first spot ETH exchange-traded fund (ETF) by the US Securities and Exchange Commission (SEC).
Despite prevailing bearish sentiment, indicators like the weekly Relative Strength Index (RSI) for ETH have dropped to a three-year low, hinting at a potential rally. However, increasing ETH reserves on exchanges may pose a challenge to upward momentum. Concerns also persist regarding the continuous selling of ETH by the Ethereum Foundation, which could be contributing to price suppression.
As of the latest data, ETH is trading at $2,268, reflecting a 3.7% increase over the past 24 hours. With a bullish MVRV-Z score, increasing accumulation by whales, and technical indicators pointing towards a potential rally, Ethereum may be gearing up to surprise the market with a significant price increase in the near future. Stay tuned for more updates on ETH’s price movements.