- Ethereum volatility has declined to a record low level.
- Ethereum’s on-chain metrics have flipped bullish, signaling an upcoming price rally.
- ETH price holds above the $1,800 level after wiping out US CPI gains.
Some of Ethereum’s on-chain metrics have flipped bullish recently, at a moment when the volatility of the altcoin’s price has hit a record low, according to data from IntoTheBlock. This combination of factors is likely to lead to an upward rally in the short term, as periods of low volatility, which usually don’t last longer than a month, are typically followed by a price spike in either direction..
Ethereum volatility hits record low alongside bullish on-chain metrics
Based on data from crypto intelligence tracker IntoTheBlock, Ethereum’s price volatility has declined to a record low. Typically, periods of decreasing volatility lead to higher adoption of the asset among holders. Still, the levels seen at the time of writing are extraordinarily low.
Ethereum volatility as seen on IntoTheBlock
The MVRV ratio, or Market Value to Realized Value, is an on-chain metric obtained by dividing the asset's market capitalization by its realized capitalization.
The higher the MVRV ratio, the more people will be willing to sell as the potential profits increase. The value of MVRV gives an idea of how much overvalued or undervalued an asset is. For Ethereum, the current value of Ethereum’s MVRV ratio indicates that ETH is undervalued as of August 11, according to data from Santiment
 [16.08.16, 11 Aug, 2023]-638273599966683146.png)
MVRV ratio for Ethereum as seen on Santiment
There are additional metrics which signal an upcoming price rally. The supply of Ethereum held on exchanges has steadily declined since May, and the supply of the altcoin held by whales – or large wallet investors – has risen in the same period.
These metrics are likely to act as bullish catalysts for Ethereum price since a low supply of tokens deposited into exchanges can be seen as a sign of increasing buying pressure and whale accumulation hints at potential increase in prices.
In mid-July 2023, there was a surge in Ethereum whale accumulation, for the first time since the Shapella upgrade. Whales scooped up Ether at discounted prices, anticipating a rally in the altcoin in the coming months.
 [16.09.12, 11 Aug, 2023]-638273601279782460.png)
Supply held by top addresses and supply on exchanges vs price
Ethereum price has sustained above the $1,800 level after US CPI and PPI data releases for July. At the time of writing, ETH is trading at $1,848.51.
Bitcoin, altcoins, stablecoins FAQs
What is Bitcoin?
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
What are altcoins?
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
What are stablecoins?
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
What is Bitcoin Dominance?
Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.
Like this article? Help us with some feedback by answering this survey:
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Bitcoin Weekly Forecast: BTC nosedives below $95,000 as spot ETFs record highest daily outflow since launch
Bitcoin price continues to edge down, trading below $95,000 on Friday after declining more than 9% this week. Bitcoin US spot ETFs recorded the highest single-day outflow on Thursday since their launch in January.
Bitcoin crashes to $96,000, altcoins bleed: Top trades for sidelined buyers
Bitcoin (BTC) slipped under the $100,000 milestone and touched the $96,000 level briefly on Friday, a sharp decline that has also hit hard prices of other altcoins and particularly meme coins.
Solana Price Forecast: SOL’s technical outlook and on-chain metrics hint at a double-digit correction
Solana (SOL) price trades in red below $194 on Friday after declining more than 13% this week. The recent downturn has led to $38 million in total liquidations, with over $33 million coming from long positions.
SEC approves Hashdex and Franklin Templeton's combined Bitcoin and Ethereum crypto index ETFs
The SEC approved Hashdex's proposal for a crypto index ETF. The ETF currently features Bitcoin and Ethereum, with possible additions in the future. The agency also approved Franklin Templeton's amendment to its Cboe BZX for a crypto index ETF.
Bitcoin: 2025 outlook brightens on expectations of US pro-crypto policy
Bitcoin (BTC) price has surged more than 140% in 2024, reaching the $100K milestone in early December. The rally was driven by the launch of Bitcoin Spot Exchange Traded Funds (ETFs) in January and the reduced supply following the fourth halving event in April.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.