Ethereum Currently Undervalued – But Is It Time To | Crypto News
According to the latest on-chain data, Ethereum seems to be getting into a state of undervaluation, with the potential of rebounding to new highs. However, the query is — is it actually time to buy ETH?
ETH Could Drop Another 40% Before Bear Cycle Ends
In a new Quicktake post on the CryptoQuant platform, crypto analyst Burak Kesmeci shared that Ethereum, the second-largest cryptocurrency by market cap, is beginning to grow to be comparatively low cost. The related on-chain indicator in this commentary is the MVRV (Market Value to Realized Value) ratio, an indicator that compares a coin’s market cap and its realized cap.
Typically, the MVRV ratio affords insight into how the worth the buyers (of Ethereum, in this case) maintain (the market cap) measures against the worth they put in (the realized cap). When the worth of this ratio is larger than one, it means that more buyers are in revenue at the second. On the flip facet, a lower-than-one ratio suggests that holders are at the moment underwater.
Typically, high MVRV values are thought-about cycle top alerts, while a low ratio signifies that the cryptocurrency has either reached or is close to a backside. According to Kesmeci, the Ethereum MVRV is at the moment at 0.9, which means that ETH could be getting undervalued.
However, Kesmeci talked about that while Ethereum is certainly low cost, there’s still a probability the altcoin will get cheaper from its current price level. To clarify this level, the analyst highlighted the Realized Price Bands metric, noting that the ETH price has often gravitated toward the inexperienced band (the Realized Price decrease band) in bear cycles.
According to data from CryptoQuant, the inexperienced band at the moment sits at around $1,152, suggesting a potential additional downturn of over 40% from the current price level.
Kesmeci added:
So yes, MVRV at 0.9 confirms ETH is getting cheaper. But the chart also clearly exhibits that MVRV has a behavior of pushing down to 0.5 and below during full bear cycles. The Realized Price Bands verify the same image. Ethereum can dive into a lot colder waters from right here.
In abstract, the Ethereum price is at risk of additional draw back from its current price level, despite being almost 60% down from the current cycle high.
Prediction Market Bets On Ether Losing No. 2 Crypto Spot
According to an ongoing prediction market on Polymarket, Ethereum is being projected to lose its place as the second-largest cryptocurrency. The odds of the altcoin getting flipped rose to as high as 57% on the prediction market platform on Saturday.
As of this writing, the Ether token is valued at around $2,090, with a market capitalization of over $253.1 billion. According to CoinGecko, the closest cryptocurrency (excluding stablecoins) to ETH is BNB, with a market capitalization of over $89 billion.
Featured image by DALL-E, chart from TradingView
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