By Solomon Odunayo
Ethereum (ETH), the second-largest cryptocurrency by market cap, has recently retested the 4-digit region following a slight pullback that was envisaged as the beginning of huge losses by some market observers.
Despite the significant performance printed lately, some on-chain metrics are suggesting that ETH is still undervalued.
Ethereum’s Swift Upside Trend
About 24 hours ago, Ethereum (ETH) showcased a surging trend that took its price beyond $1,000, raising the possibility of recording a new price all-time high earlier than expected. But ended in a sharp retracement in the replication of Bitcoin (BTC) 10% correction.
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The price of ETH dipped back to an $800 price level within a few hours but did not linger at this level before printing another notable performance. At the time of publishing, ETH is trading at $1,050.75, with a relatively 4% price uptrend in the last 24 hours.
A lot of crypto analysts and market observers, including Gemini’s Tyler Winklevoss, are showcasing their bullish prospects for Ethereum (ETH), believing that this is just the beginning for the digital asset dubbed as “sound money”.
Regarding the bullish prospect of ETH, Alex Saunders, a prominent crypto commentator said, “Record high for ETH was on Coinbase at $1500. Currently trading at $1050 puts us 45% away. But after everything we’ve witnessed in the past 12 months, would it really surprise you to see a 50% sling shot over this weekend or even a day? I feel it’s about to shock us all.”
Despite the display of bullishness, a metric is suggesting that the digital asset still has a very long way to go.
Ethereum (ETH) Is Still Undervalued
Going by the latest Glassnode Insights report, Ethereum (ETH) spent less than a month in the 4-digit region before it was hit by the historic bear market that lingered for about two and a half years:
“However, on-chain signals suggest that we are still in the earlier stages of a bull market, relative to the same price levels in 2018.”
The report analyzed the Market Value to Realized Value (MVRV) ratio which is the relationship between market capitalization and realized capitalization.
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The metric, created by David Puell and Murad Muhmudov, gives an indication of when the traded price is below a ‘fair value.’
According to Glassnode, the MVRV ratio is still very low compared to early 2018 when the price was equivalent to current levels:
“This indicates that in the current market, there is room for significant further growth before ETH becomes overvalued.”
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