390 Interactions, 4 today
The latest speculative trend, as well as Ethereum’s price premium, indicate that the altcoin’s price could more than double in the next seven weeks.
On April 14, the price of Ether (ETH) reached an all-time high of $2,400, and although the price has more than tripled since the beginning of the year, the new speculative premium indicates that there is still a lot of space for upside.
Ether’s speculative premium is far from overheated
Although the actual price of Ether is about $2,375, the Realized Price, or the average price paid by all current Ether holders, is $802. This suggests that new Ether owners are able to pay 2.99 times the amount that all current Ether holders have paid on average for their Ether. While this can seem to be a high multiple, it reached as high as 6 during the previous bull market.
To arrive at this multiple, divide the Market Value of Ether (current Ether price) by the Realized Value (what all current holders paid on average for their Ether). This multiple is known as the MVRV ratio, and it was invented by David Puell and Murad Mahmudov. It may also be described as the multiple of an asset’s market cost basis.
In the past, the MVRV ratio acted as a good indicator of when the mania got out of hand, indicating when the multiple hit a value greater than 4, and when a value less than 1 indicated a good purchasing chance.
The MVRV ratio could rise to 5 by end of May
The graph below depicts the numerous over the course of Ether’s life. It is clear that it has been following an upward trend pattern since December 2019.
If this pattern continues, we could see a similar MVRV ratio run-up as in the past, and finally a multiple of 5 by the end of May. Based on the existing Realized Price of $802, this will imply a retail price of $4,010 for Ether, representing a 71 percent price rise.
Even better, the Realized Price is projected to increase over time as more customers enter the market. It has risen by 15.1 percent in the last month alone. At the end of May, the Realized Price may have risen by 26.43 percent to about $1,014 per Ether. Based on a multiple of 5, this will result in a retail price of $5,070 per Ether, a 116 percent rise.
Fasten your seatbelt
This forecast is a real possibility, particularly given how often Ether and Bitcoin set new all-time highs. When it comes to price and time goals, there are no promises. However, there are odds, and this on-chain predictor indicates that the upside case has a much higher probability of occuring.
$5,000 for one Ether by the end of May may seem absurd now, but $2.4k seems absurd a year earlier when Ether ended the day at $159.