Ethereum (ETH) Breaks $4,000: Historical Trends Signal Early Bull Phase

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As a seasoned researcher with years of experience studying the crypto market, I find myself intrigued by Ethereum‘s recent surge above $4,000. The historical data suggests that we might be witnessing the early stages of a prolonged bull market, a prospect that excites me as much as it does other enthusiasts.

On Monday, 16th December, the price of Ethereum (ETH) surpassed $4,000 once more. Historical trends indicate that this increase might signal a lengthy bull market ahead. This upward trend occurs as numerous analysts predict that ETH could mirror Bitcoin‘s (BTC) trajectory after Bitcoin achieved another record high.

However, does this optimistic forecast actually stand up? This examination of on-chain data for Ethereum considers significant historical statistics that have impacted its price trends.

Ethereum Investors Are Back in “Belief” Mode

Based on Glassnode’s analysis, Ethereum reaching $4,000 has positively influenced the attitude of long-term investors towards the cryptocurrency. To understand the current feelings about ETH, BeInCrypto considered the Long-Term Holder Net Unrealized Profit/Loss (LTH-NUPL) to gauge investor sentiment.

The LTH-NUPL assesses the behavior of investors who have held a cryptocurrency for more than 155 days. This metric is divided into several parts: capitulation (red), hope (orange), optimism (yellow), belief (green), and euphoria (blue).

Using Ethereum’s Historical data, capitulation represents a bear market, and in most cases, ETH’s price fails to record a notable increase during this period. The phase between hope and optimism highlights a period of exiting the bear market, while belief indicates the early bull market phase. Lastly, euphoria indicates when the cryptocurrency is close to the cycle top.

Looking at the chart, it appears that Ethereum’s Long-term Holders Net Unrealized Profit Ratio (LTH-NUPL) is currently within the “confidence” zone. This suggests that Ethereum’s price might have more potential to increase. Historically, Ethereum has experienced significant growth when it enters the “excitement” or “euphoria” phase. Since Ethereum is still in the “confidence” stage, it could be on a trajectory to soar above $4,000 in the upcoming weeks, given past trends.

The MVRV ratio, which compares a cryptocurrency’s current market value to the profit realized from its purchase, suggests that ETH might experience an additional price increase. This ratio helps determine if a cryptocurrency is underpriced or overpriced by evaluating its profitability within the market.

Generally speaking, when the MVRV (Market Value to Realized Value) ratio is high, investors are more inclined to sell their holdings. On the other hand, a low MVRY ratio suggests they may choose to HODL (Hold On for Dear Life). As per Santiiment’s analysis, Ethereum’s 30-day MVRV currently stands at 8.73%, which is lower than the 22.61% it peaked at in March.

This suggests that Ethereum (ETH) remains relatively underpriced, strengthening the belief that its worth could increase significantly over the next few weeks and months.

ETH Price Prediction: Time to Get Closer to $5,000

On the day-to-day chart, Ethereum’s price maintains robust support near $3,075 – a crucial point that contributed significantly to the ongoing upward trend. Additionally, Ethereum (ETH) has successfully surpassed the resistance at $4,003, suggesting persistent bullish energy.

The Bull-Bear Power (BBP) index, a tool that compares the force of buyers versus sellers, continues to show a favorable position, supporting the continuation of the uptrend.

As a researcher, I’m observing that if the current trend persists, the dominance of the bulls might propel Ethereum’s price towards an estimated $4,400. Yet, should the bears regain control, there’s a possibility that Ethereum could reverse its upward trajectory and potentially dip down to around $3,578.

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2024-12-17 11:37