Ethereum prices continue to struggle in April as they barely hold the $1,600 level this weekend. Despite its overwhelming performance, some investors are still keeping an eye on the cryptocurrency, the second largest by market capitalization. So, popular crypto trader X on social media platforms assumes that it may be time to buy Ethereum tokens again.
Have ETH prices reached the bottom?
In a post on April 19th on X, renowned crypto analyst Ali Martinez revealed that Ethereum has reached a critical on-chain level. This on-chain observation revolves around market value and revolves around the price range of realized value (MVRV). It is usually based on a set of MVRV values that describe the extremes of the market cycle.
The MVRV (from market value to realised value) ratio is an indicator that tracks the ratio of the market capitalization and the realised cap of a coin. If the value of this ratio is above 1, it means that more investors are currently considered to be profitable.
Typically, MVRV ratios provide insight into how investors’ value (market capitalization) is measured against the value they put into (realization cap). On the other hand, price ranges can help you estimate the extremes of the coin’s market cycle. High levels show extreme unrealized gains, while low levels show extreme unrealized losses.
In the context, a high MVRV value is considered the top signal of the price, as traders are usually more likely to offload assets when they are on the green. On the other hand, a low MVRV ratio means that the market cycle has reached its bottom.
Source: @ali_charts on X
The blue price range represents a very low level with an MVRV below 0.8 on approximately 5% of the trading day. On the other hand, the red price band is at a very high level, with MVRV values trending above the 2.4 mark at around 6% of trading date.
As shown in the chart above, Ethereum prices have fallen below the blue pricing band over the past few days. Historically, every time ETH prices drop to this very low level, that means that Altcoin may be at a bottom and preparing to turn the trend around.
Ethereum prices are at a glance
At the time of this writing, ETH prices were just above $1,610, reflecting a 1.4% increase over the past 24 hours. According to Coingecko data, Altcoin has fallen by 2% over the past seven days.
The price of ETH on the daily timeframe | Source: ETHUSDT chart on TradingView
ISTOCK featured images, TradingView chart
