Since dropping sub-$100 in the March catastrophe, ethereum bulls seem to be on a tear the past few days. The top altcoin is up more 20 percent since yesterday to trade at over $170. Yet, according to one key metric, ETH is still undervalued.
ETH Outruns Bitcoin (BTC) To Skyrocket 11%
ETH bulls are finally reawakening after last month’s unprecedented slaughter. The bullish momentum intensified yesterday (April 6) as it obliterated the resistance at the $160 level.
The second-most valuable cryptocurrency in the world is also painting a mini-parabola structure on the daily chart. If this structure holds, ETH could soon surge higher. Moreover, a weekly close above $150 will justify further upside movements for the ethereum price.
Ethererum has noticeably outperformed bitcoin (BTC) today after rallying 11.01% in the past 24-hour period. BTC, on the other hand, has gained a mere 3.60% over the same timeframe. The king of cryptocurrencies is now trading at $7,374.90 after briefly tapping $7,400.
MVRV Ratio Suggests That ETH Is Currently Undervalued
Although ETH has seen an impressive rally since yesterday, the asset remains undervalued at the current prices.
Glassnode -an on-chain research and analytics firm- recently noted that ETH’s MVRV ratio is currently below 1. An MVRV ratio is calculated by dividing the market value by the realized value and is used to examine an asset’s “fair value”. This is subsequently used to determine whether or not an asset is undervalued.
As per the firm, this ratio currently stands at 0.8, suggesting that ETH is currently undervalued in spite of the recent phenomenal recovery. Ethereum’s realized price is $202 but the coin was changing hands at $164 at the time the firm made the observation. ETH is trading at around $172.21 at the time of publication, meaning it is still undervalued.
Where Is ETH Headed In The Near-Term?
Ethereum remains bullish in the medium to long-term. The launch of the long-waited ETH 2.0 is slated for July this year which is just a little over three months away.
This upgrade includes a series of updates aimed at improving speed and scalability and also to transition the ethereum protocol to a Proof-of-Stake (PoS) model from the present Proof-of-Work (PoW). ETH 2.0 realization adds to the bullish case of the ethereum blockchain.
In the near-term, analyst Crypto Michael sees more upside potential for ETH on the USD pair as well as the BTC pair. With the USD pair, he expects the crypto-asset to surmount $195 after overcoming $159.