A new report from GlassNode revealed historically significant Ethereum levels that could mark the onset of an overheating phase if compromised.
Ethereum is moving towards active realised prices
In its latest weekly report, on-chain analytics firm GlassNode explains Ethereum’s valuation model. The models in question are realised prices, true market averages, and active realised prices.
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These initial prices refer to the average cost basis or acquisition price of all tokens of cryptocurrency that are currently part of the distribution supply.
The other two models, the true market average and active realised prices, also aim to find a network cost base, but both of these exclude long-term coins. Such tokens are not part of the economic supply as they are likely to be lost due to missing wallet keys. Therefore, these models may provide a more accurate measure of market conditions than realised prices.
Now, here’s a chart showing trends in Ethereum’s three on-chain pricing models over the last few years.
As shown in the graph above, the realised prices, true market averages, and active investor prices for Ethereum are located at around $2,100, $2,500 and $3,000 respectively. This means that at current spot values in ETH, all models agree that the entire holder is on the green.
But now, as assets have escaped on top of these rows, what’s next? “To measure the upside target of this ETH rally, we can look at the +1 standard deviation band of the active realised price of Ethereum,” GlassNode said.
The +1 standard deviation (SD) band of the indicator is where sales pressures have been strengthened in the past. The reason behind the trend may be the fact that investors’ profits are important beyond this boundary, which could make it more likely that large-scale sales will occur with the aim of making profits.
Below is a chart showing where this level is currently for ETH.
From the graph, you can see that the realised price of Ethereum Active +1 SD is currently at $4,500. ETH is still off the level at the moment, but if the recent bullish push continues, it could be retested.
In the current cycle up to now, ETH tested the boundaries once in March 2024. At the time, cryptocurrency discovered its rejection. In the 2021 Bull Run, the coins were able to surge past that, but in doing so they launched an unsustainable euphoric market phase.
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“So, $4,500 can be identified as a critical level of monitoring benefits, especially when Ethereum continues to rise and further speculative bubbles are being built,” the analytics company explains.
ETH Price
At the time of writing, Ethereum is floating around $3,600, an almost 7% increase over the past seven days.
Dall-E, Glassnode.com featured images, tradingView.com charts
