On Monday, December 16, Ethereum (ETH) price climbed above $4,000 again, with historical data suggesting that the return could be the beginning of a prolonged bull market. This development comes as several analysts opine that ETH could follow in Bitcoin’s (BTC) steps after the latter reached another all-time high.
But will these bullish predictions hold? This on-chain analysis looks at key historical data of Ethereum that have influenced its price action.
Ethereum Investors Are Back in “Belief” Mode
According to Glassnode, Ethereum’s return to $4,000 has improved the sentiment of Long-Term Holders (LTH) toward the cryptocurrency. In getting the current perception around ETH, BeInCrypto evaluated the Long-Term Holder-Net Unrealizes Profit/Loss (LTH-NUPL),
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.
Ethereum Long Tern Holder NUPL. Source: Glassnode
As seen above, Ethereum’s LTH-NUPL currently sits in the belief region, indicating that ETH’s price may have further room to grow. In past cycles, Ethereum has seen substantial gains upon entering the euphoria zone. With ETH still in the belief phase, the cryptocurrency could be on track to climb well beyond $4,000 in the coming weeks.
The Market Value to Realized Value (MVRV) ratio is another metric that supports a further price hike for ETH. This ratio assesses whether a cryptocurrency is undervalued or overvalued by assessing its market profitability.
Typically, the higher the MVRV ratio, the more likely holders are to sell. If it is low, it increases the chances of HODLing. According to Santiiment, Ethereum’s 30-day MVRV ratio is 8.73%, which is lower than the 22.61% it reached in March.
Ethereum Market Value to Realized Value Ratio. Source: Santiment
This indicates that ETH is still close to being undervalued and reinforces the idea of a higher value in the coming weeks and months.
ETH Price Prediction: Time to Get Closer to $5,000
Ethereum’s price continues to hold strong support around $3,075 on the daily chart, a level that played a key role in driving the recent rally. ETH has also cleared the $4,003 resistance, indicating continued bullish momentum.
The Bull Bear Power (BBP) indicator, which measures buyer strength against sellers, remains in positive territory, reinforcing the upward trend.
Ethereum Daily Analysis. Source: TradingView
If the trend holds, this bulls’ dominance suggests ETH’s price could climb toward $4,400. However, if bears regain control, ETH could reverse its gains and drop toward the $3,578 level.
