On December 16, Ethereum (ETH) surged past the $4,000 mark once more, raising speculation among analysts that this could herald the onset of a more sustained bull market. Such optimism stems from historical data suggesting ETH might follow Bitcoin’s trajectory, which achieved another record high recently.
Yet, questions abound: can these bullish forecasts be trusted? This analysis delves into Ethereum's past data that have been pivotal in its price movements.
Ethereum's climb to $4,000 has reignited a strong sense of belief among Long-Term Holders (LTH), according to Glassnode. The sentiment shift became evident when BeInCrypto analyzed the Long-Term Holder-Net Unrealized Profit/Loss (LTH-NUPL), a tool that examines investor behavior for assets held for over 155 days.
LTH-NUPL divides into phases: capitulation (red), hope (orange), optimism (yellow), belief (green), and euphoria (blue). Historically, capitulation aligns with bear markets where ETH prices stagnate. The transition from hope to optimism signals the end of a bear era, while belief indicates an early bull market. Euphoria suggests nearing a peak in the cycle.
Currently, Ethereum's LTH-NUPL resides in the belief zone, signaling possible upward momentum. Historically, entering the euphoria phase often triggers larger profits for Ethereum, implying potential growth beyond $4,000 in the approaching weeks.
A supporting metric is the Market Value to Realized Value (MVRV) ratio, which evaluates a cryptocurrency’s market profitability to discern if it's undervalued or overvalued. A higher MVRV prompts selling due to perceived high valuations, while a lower one encourages holding.
Santiment reports Ethereum's 30-day MVRV ratio is 8.73%, comparatively lower than March's 22.61%, suggesting ETH remains undervalued and poised for further appreciation.
Ethereum demonstrates strong support at the $3,075 level on its daily chart, a foundation integral to its recent ascent. Breaking past the $4,003 resistance underscores ongoing bullish vigor.
The Bull Bear Power (BBP) indicator, measuring buyer versus seller strength, remains positive, confirming the prevailing uptrend. If this upward trajectory persists, ETH could approach $4,400. Conversely, if bearish forces prevail, it may drop back to around $3,578.