The latest on-chain data shows that the second-largest cryptocurrency by market capitalization, Ethereum, may be currently undervalued. Having witnessed a strong resurgence in the past week, the altcoin could be on the verge of an extended rally over the next few weeks.

Ethereum’s NVT Ratio Hits New Record Low 

In a Quicktake post on the CryptoQuant platform, crypto analyst CryptoOnchain reported that there has been a disproportionate increase in transaction volume concerning ETH compared to its market capitalization.

The relevant indicator here is the Ethereum NVT (Network Value to Transactions ratio) (30-day SMA), which measures the ratio of Ethereum’s market capitalization to its daily transaction volume over the span of 30 days. 

Related Reading

CryptoOnchain revealed that the 30-day moving average NVT recently hit its lowest point ever recorded. As explained by the on-chain analyst, this could suggest two things: firstly, that the Ethereum token is undervalued.

For context, a low NVT reflects very high transaction volume compared to a relatively low market capitalization. What this means is that the Ethereum network is being heavily used, but the price isn’t showing its worth as much as its usage suggests. Following this logic, one could conclude the market is currently undervaluing Ethereum’s utility.

The second indication from the historically low NVT is that the increase in transaction volume could be due to “temporary factors such as DeFi, NFT events, or large capital movements.” According to the analyst, these temporary factors do not necessarily mean sustainable growth for the ETH price.

What To Expect

CryptoOnchain cited historical occurrences to explain the typical case where an NVT bottom is a result of market undervaluation. In this case, it has been observed that sharp NVT bottoms precede bullish phases.

However, in what was a caveat, the online pundit mentioned that there have been cases where very low NVT levels were accompanied by further price declines. 

Seeing that the Ethereum NVT is not just at a mere low level, but at its all-time low, it seems more likely that the market is undervaluing the token’s worth. It is therefore not out of the question to expect a more upward swing in the price of the cryptocurrency. 

Related Reading: Ethereum To $6,800 By Year End? CME Futures Data Shows Record Institutional Demand

Nevertheless, with the possibility that a bullish phase might not necessarily follow in mind, investors might want to tread cautiously. As of this writing, the Ethereum token is valued at approximately $4,670, reflecting an over 4% price increase in the past 24 hours.

Featured image from Shutterstock, chart from TradingView

White House “Crypto Czar” David Sacks said the market is “reading a little bit too much” into President Donald Trump’s mention of Solana (SOL), Cardano (ADA), and XRP for the US Digital Asset Stockpile.

During an interview with Bloomberg Technology, Sacks said:

“The President just mentioned the top five cryptocurrencies by market cap. So I think people are just reading into this a little bit too much, he just mentioned the top five.”

He also revealed that the stockpile includes measures to stake or sell the altcoins held in it.

Altcoin audit

Sacks said the US government will audit its crypto holdings and check which altcoins are stored with the authorities. After sorting the altcoin amounts, the government will move every coin besides Bitcoin (BTC) to the Stockpile for safekeeping.

Sacks estimated that the US currently holds roughly 200,000 BTC and some Ethereum (ETH), but he is unsure about the rest.

On March 2, Trump mentioned SOL, ADA, and XRP when discussing creating a “Crypto Strategic Reserve.” It formally became the US Digital Asset Stockpile on March 6, when the President signed an executive order on the matter while simultaneously creating a Strategic Bitcoin Reserve.

Staking and rebalancing 

Sacks highlighted that Scott Bessent, Secretary of the US Treasury, will then exercise “responsible stewardship” over the altcoins held by the Stockpile. 

This includes discretion to rebalance the altcoin portfolio in the best interest of US citizens and potentially staking. 

Sacks explained:

“The Secretary of the Treasury and his team will be able to exercise portfolio management and responsible stewardship. And yes, that could include staking, it could include rebalancing, it could include sales.” 

However, he clarified that this rationale will not be applied to the Strategic Bitcoin Reserve. 

The Reserve consists of Bitcoin seized through criminal and civil forfeiture, preventing its sale, and Sacks said the US wants a long-term strategy to maximize the value of its BTC holdings.

While highlighting that the US sees Bitcoin as “scarce, valuable, and strategic to hold” as a long-term reserve asset, he said:

“The Bitcoin we want to keep long-term, so there is a difference there in objective. With the Reserve, the goal is the long-term preservation; with the Stockpile, the goal is responsible stewardship, portfolio management of assets.”

Mentioned in this article

His technical expertise and analytical skills have been recognized and featured by leading news outlets such as Investing.com, CoinTelegraph, Entrepreneur, Forbes, and other authority sites. Notably, he broke key news, including the Ripple and MoneyGram partnership, cementing his position as a thought leader in crypto.
The news exploded. Over 100,000 people devoured this meticulously crafted report, from seasoned investors to curious newcomers. His analysis wasn’t just dry facts and figures; it crackled with insight, dissecting the implications of the partnership and its potential impact on the future of finance.

His deep understanding of the financial markets, technological advancements, and blockchain developments has made him a respected voice in the industry.

Dalmas is also the founder of BTC-Pulse, a crypto news site, further demonstrating his commitment to the field. He firmly believes that DeFi and NFTs are here to stay and will continue to drive financial inclusion.

Coming from Nairobi, Kenya, it is easy to see the source of his inspiration: Across Africa, millions lack access to traditional banks. Remote villages, limited documentation, and high minimum balances create insurmountable barriers.

DeFi, not just Maker or Aave, for example, but think of Bitcoin and USDT, cuts out the middleman. Forget banks with their limitations.
Even so, DeFi isn’t a magic solution. The continent still struggles with reliable internet access, and educational campaigns highlighting the benefits of this wonderful solution are insufficient. Moreover, even for those interested, understanding DeFi can look like learning a new language.

Dalmas is here to help make the tech easy to understand and digestible, even for beginners.
The story of DeFi in Africa is still being written. Challenges abound, but the promise of a more inclusive financial future is a powerful motivator. With innovation and collaboration, Dalmas firmly believes that DeFi could become the key to unlocking Africa’s full economic potential.
This possibility and its immense value motivate Dalmas to continue breaking key DeFi innovations and more across the globe. His engineering background further enhances his ability to deliver well-thought-out pieces that blend technical insight with clear, impactful reporting.

Beyond his professional achievements, Dalmas is deeply passionate about technology and politics. Policies drive adoption, and being at the forefront and keeping up with how they evolve is crucial for the sphere to mature.

When Dalmas is not closely monitoring the latest crypto events, he can be found in nature, exploring the picturesque countryside, and traveling with his family and friends. His love for adventure and discovery perfectly complements his investigative and reporting skills.
You can connect with Dalmas on X: @Dalmas_Ngetich, or contact him on Telegram @Dalmas_Ngetich.

After 216 days, the Bitcoin Market Value to Realized Value (MVRV) ratio finally broke above 1, making this accumulation the second longest after it took BTC prices 300 days to bottom up after the bear run of 2014-2015. It also signals the likelihood of another refreshing BTC rally after gains of last week.

Bitcoin’s MVRV Breaks Above 1

The breakout coincided with BTC prices surging to as high as $23,300 on Saturday, January 21, a positive development, especially for optimistic holders. 

As of writing on January 22, prices have cooled off, and the coin is trending at around $22,700, albeit with relatively low trading volumes. Still, the retracement puts BTC within a bullish formation following impressive gains on January 20 when the coin printed higher, defying gravity and confirming demand.

The MVRV ratio changes depending on Bitcoin’s market forces. The prevailing sentiment is that BTC is bottoming up. Bulls could be preparing for another leg up, injecting the much-needed volatility and volatility into the crypto markets. However, the absence of confirming indicator presented problems. 

Technical and fundamental analysts may use the MVRV ratio to time market entries and exits. Typically, whenever the MVRV ratio is below 1, then it implies that prices are at their bottom. 

Any reversal from sub-1 to above 1 with increasing valuation may signal price bottoms and, possibly, more room for upsides in the coming days. This signal could be a precursor to guide swing and long-term traders to hold on to their long positions and wait for more gains before exiting once BTC becomes overvalued based on on-chain readings.  

Conversely, historical values reveal that whenever the MVRV is above 3.7, there is a real probability that the Bitcoin market will be overheating. Subsequently, it could be the best time to exit and take profits.  

Bitcoin Sentiment Shifting

To MVRV ratio is dynamic, changing depending on the fluctuating valuation of BTC. At any point, the MVRV ratio is calculated by dividing the market value and the realized value of bitcoin. The market value measures the prevailing sentiment amongst holders, which, as history shows, changes depending on spot rates.

Meanwhile, the realized value considers each coin’s actual spending. Calculating the realized value takes into account the acquisition cost of each coin in question. If the MVRV ratio is below 1, should coins be sold, most holders will realize losses. 

The more the MVRV ratio increases, the more holders and traders will be willing to sell as they get more into the money. Subsequently, the ratio is a good gauge of whether BTC is overvalued or undervalued in the short, medium, or long term. 

Streams from IntoTheBlock show that, on average, 62% of BTC holders are making money, with 36% losing money.

Feature Image by Freepik, Chart by TradingView

Please be aware that some of the links on this site will direct you to the websites of third parties, some of whom are marketing affiliates and/or business partners of this site and/or its owners, operators and affiliates. We may receive financial compensation from these third parties. Notwithstanding any such relationship, no responsibility is accepted for the conduct of any third party nor the content or functionality of their websites or applications. A hyperlink to or positive reference to or review of a broker or exchange should not be understood to be an endorsement of that broker or exchange’s products or services.

Risk Warning: Investing in digital currencies, stocks, shares and other securities, commodities, currencies and other derivative investment products (e.g. contracts for difference (“CFDs”) is speculative and carries a high level of risk. Each investment is unique and involves unique risks.

CFDs and other derivatives are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how an investment works and whether you can afford to take the high risk of losing your money.

Cryptocurrencies can fluctuate widely in prices and are, therefore, not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework. Past performance does not guarantee future results. Any trading history presented is less than 5 years old unless otherwise stated and may not suffice as a basis for investment decisions. Your capital is at risk.

When trading in stocks your capital is at risk.

Past performance is not an indication of future results. Trading history presented is less than 5 years old unless otherwise stated and may not suffice as a basis for investment decisions. Prices may go down as well as up, prices can fluctuate widely, you may be exposed to currency exchange rate fluctuations and you may lose all of or more than the amount you invest. Investing is not suitable for everyone; ensure that you have fully understood the risks and legalities involved. If you are unsure, seek independent financial, legal, tax and/or accounting advice. This website does not provide investment, financial, legal, tax or accounting advice. Some links are affiliate links. For more information please read our full risk warning and disclaimer.