On-Chain Indicators for ETH Suggest an Altcoin Price Surge

Discover how Ethereum’s on-chain indicators point to a possible surge in altcoin prices.

Understand the significance of the Market Value to Realized Value Ratio (MVRV) and what it means for the current market.

Despite Bitcoin’s recent downtrend, could we be at the dawn of an altcoin season? Get insights into market trends and potential future movements in this comprehensive analysis.

Is the ETH Market Heating Up and Leading Altcoins to Follow?

On June 21, 2024, CryptoQuant, a cryptocurrency analysis company, reported that Ethereum (ETH) on-chain indicators suggest a potential surge in altcoin prices.

CryptoQuant highlighted that the “Market Value to Realized Value Ratio (MVRV) is rising faster for Ethereum (ETH) compared to Bitcoin (BTC),” indicating that the ETH market is heating up.

Historically, when Ethereum experiences a sharp increase, other altcoins tend to follow suit.

What is the Market Value to Realized Value Ratio (MVRV)?

The Market Value to Realized Value Ratio (MVRV) is an indicator that measures the ratio between a cryptocurrency’s market value and its realized value, helping to determine if a specific cryptocurrency is overvalued or undervalued (MVRV = Realized Value ÷ Market Value).

Market value is calculated by “current price × total supply issued,” while realized value is calculated based on “the price at which each coin last moved × total supply issued.”

If the MVRV is above 1, the market value exceeds the realized value, suggesting the asset may be overvalued. Conversely, if the MVRV is below 1, the market value is less than the realized value, indicating the asset may be undervalued.

Are We in the Early Stages of an Altcoin Season?

CryptoQuant’s posted image uses Ethereum’s MVRV to indicate the timing of altcoin seasons. Blue signifies an altcoin season, gray a Bitcoin season, and black a neutral state.

The recent image suggests that “the cryptocurrency market was in a Bitcoin season phase, and we are now in the early stages of an altcoin season.”

Bitcoin prices hit an all-time high in USD in March this year and are now trending down, while many altcoins have entered a downward phase without reaching their all-time highs.

Despite ongoing price declines in the cryptocurrency market, concerns about a significant crash are growing. However, if an altcoin season truly begins, altcoins that have been in a downward or stagnant phase could start to show recovery trends.

Warnings About Further Bitcoin Declines

In a June 22, 2024, post, CryptoQuant also warned of a potential 8% to 12% correction towards $60,000 for Bitcoin (BTC).

The company noted, “Bitcoin has fallen below $65,800, a critical support line, down to $64,000,” cautioning that Bitcoin might continue to experience significant declines.

>> Click here for other price projections