The price of Ether (ETH) reached its all-time high of $ 2,400 on April 14, although it has more than tripled since the start of the year. The data indicate that cryptocurrency could rise much more.
Ether’s speculative premium did not rise much
While the price of Ether hovered around $ 2,413, the actual price of cryptocurrency, that is, the average price paid by all investors who currently have Ether, was measured at $ 802. This means that Ether buyers are willing to pay 2.99 times the average price all investors are currently paying. Although the rate seems high, it rose up to 6 times in the past bull market.
The MVRV Ratio is obtained by dividing the market value of Ether (current Ether price) by the actual value (the average price paid by all traders). This ratio can also be defined as the market’s cost base for an asset.
MVRV has been used in the past to detect when the market craze got out of control. While the ratio above 4 rings the danger bells, falling below 1 offers a good buying opportunity.
MVRV rate could rise to 5 in May
The chart below shows the MVRV ratio of Ether since its launch. MVRV becomes visible on the uptrend channel formed in December 2019.
If this trend continues and there is an MVRV rate rise similar to what we have seen in the past, the rate could rise to 5 by the end of May. Given that the actual price was $ 802, this means that Ether could rise 71 percent to reach $ 4,010.
Moreover, with new buyers entering the market, the actual price is expected to increase over time. The actual price increased by 15.1 percent last month alone, suggesting that it could rise by around $ 1,014, up 26.43 percent by the end of May. If the MVRV rate also rises to 5, the market value of Ether could increase by 116 percent, even to $ 5,070.
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