On-chain data indicates that Ethereum recently fell below a key Market Value to Realized Value (MVRV) pricing band during the latest price decline. As analyst Ali Martinez noted in an X post, Ethereum dropped under the 0.80 MVRV band.
The MVRV Ratio is a widely used on-chain metric that compares Ethereum’s market capitalization to its Realized Cap. The Realized Cap is a valuation model that calculates the total value of an asset by assuming each token is worth the price at which it was last moved on the blockchain. Since the last transfer typically represents the most recent change of ownership, that price can be seen as the token’s current cost basis. Essentially, the Realized Cap estimates the total capital invested in Ethereum by all holders.
While market cap reflects the current value held by investors, comparing it to the Realized Cap via the MVRV Ratio reveals the profit or loss status of Ethereum holders. An MVRV Ratio above 1 indicates that investors are, on average, sitting on unrealized profits. Conversely, a ratio below 1 suggests that losses are prevalent across the network.
Historically, extreme deviations from 1 in either direction have often preceded price reversals. When the ratio is significantly above 1, investors may be more inclined to take profits. When it falls well below 1, selling pressure can diminish as losses mount, potentially setting the stage for a bottom.
The MVRV Pricing Bands model identifies specific price levels for Ethereum where these dynamics become more pronounced. According to the chart shared by Martinez, Ethereum dropped below the 1.0 pricing band—equivalent to $2,449—during its late-January decline, pushing the overall market into a loss position. As bearish momentum continued into early February, Ethereum fell further, breaching the 0.80 pricing band, which currently stands at $1,959.
Martinez pointed out, “The last three times Ethereum $ETH dipped below the 0.80 Pricing Band, it marked a market bottom.” It remains to be seen whether this recent breach will also signal a bottom for Ethereum this time.
Following last week’s drop, Ethereum has rebounded slightly, with its price recovering to $2,044—above the 0.80 MVRV pricing band once again.
Frequently Asked Questions
Frequently Asked Questions About Ethereum Falling Below the MVRV Band
Beginner Questions
What does Ethereum has fallen below the MVRV band mean
It means that Ethereums market value has dropped below its realized value The MVRV band is a range around this value Falling below it suggests the asset may be significantly undervalued
What is MVRV
MVRV stands for Market Value to Realized Value Its a popular onchain metric that compares Ethereums current market price to the average price investors paid for their coins It helps gauge whether the network is overvalued or undervalued
Why is this a signal for a market bottom
Historically when Ethereums price has fallen below its realized value it has often indicated extreme fear or capitulation in the market This has coincided with major price bottoms in the past as selling pressure exhausts itself
Is this a guarantee that the price will go up now
No it is not a guarantee While it has been a strong historical indicator past performance does not predict future results It signals a higher probability of being in a bottoming zone but prices could stay low or go lower due to other macroeconomic or cryptospecific factors
Intermediate Advanced Questions
How reliable is this signal
It has been a very reliable contrarian indicator in previous bear markets However no single indicator is perfect Its best used in combination with other metrics to build a stronger thesis
What are the last three market bottoms this refers to
This typically refers to the major cyclical lows in
1 Early 2019
2 March 2020
3 June 2022
Does falling below the MVRV band mean its time to buy
For many longterm investors it is considered a strong accumulation zone signal The idea is that you