ETH Pulls Back to $3,500 — But MVRV Hints at Bullish Continuation

With Ethereum staying around $3,900 for the previous two weeks, a break over $4,000 seems likely. The rapid negative pressure on ETH changed this almost-certain scenario.
Ethereum temporarily dropped below $3,500 on Friday, August 1. Despite this, recent on-chain signs show that the “king of altcoins” may yet rise beyond $4,000 and achieve a new all-time high.
Ethereum pricing may still be in the tank despite its weekend troubles. This assessment uses the MVRV ratio, which compares an asset's market and realized capitalization.
The Market Value to Realized Value (MVRV) ratio is used to determine whether a cryptocurrency (ETH in this example) is overpriced. An MVRV ratio over 3.7 suggests overvaluation, while below 1 shows undervaluation, according to on-chain analytics company CryptoQuant.
ETH MVRV may reverse its 2018 downturn. The chart shows that Ether's MVRV just rejected a long-term resistance level, which explains the current profit-taking.
Ethereum may breach this seven-year barrier level given its institutional interest. The on-chain researcher stated that US spot ETH ETFs have experienced record capital inflows in recent weeks.
MVRV ratio exceeds 365-day SMA (white). If this continues, the second-largest cryptocurrency may rebound above $4,000 shortly.
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