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Is Ethereum Currently Undervalued? A Look at Deciding Stats

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By Christian Webster - - 5 Mins Read
Vector illustration of Ethereum logo
Ethereum | Unsplash
Vector illustration of Ethereum logo
Ethereum | Unsplash

 

Ethereum was the jewel of the crypto industry. However, many will still argue that it currently maintains that position. Let's say maybe it's still held on that pedestal, but the value attached to the cryptocurrency has drastically reduced.

 

At its peak in 2021, Ethereum was literally on the lips of many crypto enthusiasts, with many predicting how the token would become the next Bitcoin or even get to $100k. Or, even better than Bitcoin. Looking at Ethereum's price history, the price went up very fast, which gave many the idea of making a comparison with Bitcoin.

 

Perhaps the climax was when Ethereum's real-time price hit the $4,000 mark as its all-time high. It made many analysts go gaga, with some making huge predictions for Ethereum. To many, hitting the $4k price range then was the stepping stone it needed to move to $10k and beyond. 

 

Maybe the crypto community had a dream, a far-fetched dream, as the current Ethereum price movements are entirely from the book of horrors. Crypto horrors, perhaps. Since reaching that all-time high, the Ethereum price is now a shadow of itself, haunted by bears. Making comparisons with the all-time high now looks like an unhealthy joke. Apparently, almost a third of its price has been wiped off. Now, it is moving around $1550 to $1800, with no direction, pushed around by the market situation. The market cap looks like the bigger joke and is literally incomparable now. 

 

Ethereum 24hr price chart
Ethereum 24hr price chart | Bybit

 

The only things that look healthy for Ethereum are fundamentals. You've got to give it to the crypto project that has made some massive improvements with the fundamentals. If that's the only win the Ethereum community takes home, they will be happy. 

 

Massive Upgrades in Fundamentals, Drop in Price 

Since the bear market entered in full throttle, one of the biggest wins that still brings lines of smiles to the faces of Ethereum enthusiasts is the Merge. At least, it is worth celebrating. Not only for Ethereum lovers but for the whole crypto community. The Merge turned the Ethereum blockchain from a proof-of-work model to a proof-of-stake protocol. The major premise here is that the gigantic transaction fees now have the hope of reducing. Maybe not the level of the average network out there. Still, this is well-received progress. 

 

While the merge was a massive success, Ethereum's price still languishes in hopeless decline. It looks more like the crypto token isn't making a headway. More like moving around circles of mediocrity. You know things are getting so bad when Santiment’s Director of Marketing Brian Quinlivan noted Ethereum is gradually losing the attention it commanded. 

 

"But the lack of any sort of breakout for the asset has gradually left traders paying less and less attention to the asset (in contrast to other large caps) in the year since," Brian Quinlivan said. 

 

Any Reason for the Decline? 

Surely, besides the general bear market, there are a handful of reasons the Ethereum ecosystem and token are having some depreciation in value. Of them is the massive decline in on-chain transaction volume and trading volume. 

 

Besides, popular on-chain data aggregation protocols like Lookonchain have cited many transactions where Ethereum was dumped in large numbers. And then here comes the most important question of this piece.

 

Is Ethereum currently undervalued? Well, the Market Value to Realized Value (MVRV) ratio says yes. At the time of writing, it's down by more than 30% in the past 7 days.

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