The latest data in the chain show that the second largest cryptocurrency according to market capitalization, Ethereum, can now be undervalued. Over the past week, which was a witness to a mighty revival, Altcoin may be on the edge of the prolonged rally in the next few weeks.
NVT Ethereum’s ratio goes to a modern low record
In the Quicktake post on the Cryptoquant platform, Crypto Analyst Cryptoonechain Reported that there was a disproportionate escalate in the volume of transactions on ETH compared to its market capitalization.
The appropriate indicator here is Ethereum NVT (network value factor for transactions) (30-day SMA), which measures the ratio of the Ethereum market capitalization to the daily transaction size within 30 days.
Cryptotonchain revealed that the 30-day average mobility of NVT recently reached the lowest point ever recorded. As the analyst in the chain explained, this may suggest two things: firstly, that the Ethereum token is underestimated.
In the context, the low NVT reflects a very high transaction size compared to relatively low market capitalization. This means that the Ethereum network is heavily used, but the price does not show its value as much as it suggests its operate. According to this logic, it can be stated that the market currently underestimated the utility of Ethereum.
The second historically low NVT indication is that the escalate in transaction volume may result from “temporary factors, such as DEFI, NFT events or large capital movements”. According to the analyst, these momentary factors do not necessarily mean a sustainable escalate in ETH price.
What to expect
Cryptotonchain cited historical events to explain the typical case in which the bottom of the NVT is the result of underestimation of the market. In this case, it was observed that the acute DNA NVT precedes stubborn phases.
However, an internet expert mentioned that there were cases in which a very low NVT level was accompanied by further drops in price.
Seeing that Ethereum NVT is not only at a low level, but at a low level, it seems more likely that the market underestimated the value of the token. Therefore, it is not excluded to expect more growth in the price of cryptocurrency.
Related reading: Ethereum up to USD 6800 by the end of the year? CME Futures Data shows the saving of institutional demand
Nevertheless, having the possibility that the phase stubborn will not necessarily be to mind, investors may want to keep carefully. In this letter, the Ethereum token is valued at around USD 4,670, which reflects the price escalate by over 4% in the last 24 hours.
A distinguished picture from Shutterstock, Chart from TradingView
