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NewsBTC 2025-03-06 05:00:34

Ethereum Surges Nearly 10% As MVRV Ratio Drops Below 1—Bigger Rally Incoming?

Ethereum’s price has mirrored Bitcoin’s recent market movements. ETH experienced a rollercoaster performance earlier this week before rebounding with a 10% increase in the past 24 hours. This recovery follows a broader market correction that initially led to fear among investors. While Ethereum’s performance remains closely linked to Bitcoin’s price action, recent on-chain data suggests that ETH may enter a renewed accumulation phase. Related Reading: Ethereum Weekly RSI Drops To Lowest Level Since May 2022 – More Selling Pressure Ahead? MVRV Ratio and Institutional Accumulation Trends A post uploaded on the CryptoQuant QuickTake platform by a contributor known as Mac has particularly pointed out Ethereum’s Market Value to Realized Value (MVRV) ratio, which suggests the asset is currently undervalued. The latest data indicates that large-scale investors are increasing their ETH holdings, signaling potential support at key price levels. According to Mac, these accumulation patterns could influence Ethereum’s trajectory in the coming weeks. Mac revealed that the MVRV ratio, a key on-chain metric used to assess whether an asset is overvalued or undervalued, has fallen below 1 for Ethereum. Historically, such levels indicate an undervalued zone, meaning that Ethereum is trading close to the average purchase price of all holders, including institutional investors. ETH MVRV: Reaching a Highly Undervalued Zone “When MVRV falls below 1, it signals entry into an undervalued zone in the cycle, indicating an opportunity to buy at a level close to the average purchase price of all holders (including whale investors).” – By @MAC_D46035 pic.twitter.com/urj348TZng — CryptoQuant.com (@cryptoquant_com) March 5, 2025 The analyst also mentioned that in past market cycles, when Ethereum’s MVRV dropped below 1, it was followed by notable price recoveries. Additionally, there has been a surge in the number of ETH accumulation addresses—wallets that receive ETH but have never withdrawn. This suggests that large investors and institutions are strategically increasing their holdings, particularly at the current price range of $2,200–$2,300, where the realized price for whale investors is concentrated. This level is expected to act as a strong support zone, reinforcing the possibility of sustained accumulation. Market Conditions and Long-Term Ethereum Outlook Beyond accumulation trends, macroeconomic factors continue to play a role in shaping Ethereum’s price movements. Mac noted that liquidity policies in the US, particularly the Trump administration’s trade and monetary policies, have so far influenced risk asset performance, including cryptocurrencies. Related Reading: Ethereum Breaks Below Parallel Channel – Is ETH Collapsing To $1,250? Stricter monetary policies and inflation concerns could contribute to “sharp price drops.” Despite this possibility, Mac concluded, noting: However, Ethereum still maintains its position as the second-largest cryptocurrency by market cap and is a proven network with thousands of mature DeFi projects. As such, institutional investors are likely to accumulate more in this undervalued zone. Therefore, from a long-term perspective, the outlook for Ethereum remains positive. Featured image created with DALL-E, Chart from TradingView

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