Emily Walker
An analyst has shared insights indicating that Ethereum is entering its secondary bull run phase, based on recent trends observed in a key on-chain metric.
Ethereum’s MVRV Ratio Shows Patterns Similar to Previous Cycles
According to a CryptoQuant Quicktake post, the Market Value to Realized Value (MVRV) Ratio for Ethereum has been analyzed. This ratio is an important on-chain measurement that compares the market capitalization of an asset to its realized capitalization.
The realized capitalization reflects the total market value of Ethereum by looking at the last transaction price for each token. Essentially, it estimates the total investment made by all holders in Ethereum.
The MVRV Ratio serves to assess the current market cap against the initial costs borne by investors. When this ratio exceeds 1, it implies a net gain for investors, while a value below 1 indicates overall losses in the market.
The analyst provided a chart demonstrating the fluctuations in Ethereum’s MVRV Ratio over the recent years:
The chart illustrates that in early 2024, the MVRV Ratio soared during a price rally, but subsequently dropped to neutral levels during a consolidation phase. However, with the latest price increase in the cryptocurrency, the ratio has started to rise again, reminiscent of patterns seen in previous bull markets.
The historical analysis suggests that each of these previous bull runs consisted of two phases, where the MVRV Ratio hit high points with cooling periods in between.
If this trend continues, the initial rally earlier this year may represent the first phase, while the recent price surge could signify the beginning of the second phase. In past cycles, the second bull run significantly boosted prices beyond the first peak, indicating that Ethereum might soon exceed its early-year price highs, assuming the pattern persists.
Current ETH Price
As of now, Ethereum is priced at approximately $3,600, reflecting an increase of around 8% over the past week.