Ethereum, the largest altcoin, is currently undergoing a phase that differs from previous market cycles. While Bitcoin continues to set new records, Ethereum has yet to achieve the same feat. However, certain on-chain indicators suggest that ETH still possesses significant bullish potential.
What Do MVRV Price Bands Indicate for Ethereum?
The MVRV indicator helps to determine whether an asset is overvalued or undervalued by comparing market value to realized value. Periods when MVRV drops below 0.8 (blue) indicate significantly low prices, while exceeding 2.4 (red) suggests overvaluation.
Ethereum broke this level twice during the 2017-2018 cycle, but only managed to reach the red zone once in 2021. In the current cycle, ETH has yet to surpass this level. However, similarities exist between the consolidation processes of previous cycles and the current movement. If the price does not drop below 0.8 again, the likelihood of a similar bullish surge remains.
Mayer Multiple Model Indicates Upward Potential for ETH
The Mayer Multiple model determines trading levels for Ethereum based on its 200-day moving average. This model analyzes the relationship between the price and specific multiples of the 200-day moving average (MA). Historically, the price peaks when it reaches 2.4 times the MA while it hits the bottom when it falls below 0.8.
In all previous market cycles, ETH exceeded the 2.4 level. However, in the current cycle, it has yet to break this threshold. Notably, significant similarities exist between the price movements of 2019-2020 and the current process. Ethereum dropped below 0.8, then rose above this level and surpassed the 200-day moving average, only to dip below 0.8 again but at a higher low. Following this model, ETH needs a strong upward movement to commence a new bull run.
Ethereum's Future: What Indicators Suggest
For ETH to continue its upward trajectory, gaining upward momentum is critical. Otherwise, if it falls below the 0.8 level again, the model may become invalid. The Mayer Multiple Model indicates that ETH is still significantly undervalued. With a structure reminiscent of 2020 levels, the largest altcoin may be on the brink of a major surge. However, some on-chain indicators suggest that the current cycle may be ending, making it challenging to provide a definitive outlook on Ethereum’s future, although certain models signal strong bullish potential.
Throughout the market cycle, Ethereum demonstrates significant bullish potential, although some indicators suggest the process may be concluding. Despite this, the MVRV and Mayer Multiple models continue to point towards a possible future price increase, affirming that the current situation may create opportunities for significant growth.
