Ethereum’s MVRV indicator is showing that the price of ETH is currently well below its fair value, trading at levels not seen since 2023. Despite a continued drop in price, a whale recently bought a significant amount of Ethereum after being dormant for 2.8 years. The MVRV Z-Score for Ethereum has dipped below the neutral zone, indicating that the market is in an accumulation zone similar to that seen in late 2020 and 2023. This has resulted in a price decline of -45.3% during Q1 2025, dropping below $2000.
When the MVRV Z-Scores for Ethereum drop below 1, it suggests that the price of ETH is trading below its intrinsic worth, leading to investors buying ETH for long-term holding. A sustained low MVRV reading could indicate price undervaluation, attracting institutional and smart money participants and potentially triggering price growth. However, an extended stay in this zone may indicate lowered conviction from holders or increased market unpredictability, affecting price action.
The Z-Score exceeding the 1 level may lead to new bullish price action, while declining values may bring ETH closer to its previous cycle bottom. The data suggests potential for upcoming buying behavior or further price declines, raising the question of how low ETH would need to go to trigger a reversal. ETH has been hovering around $1,580, facing resistance at $1,612.59 and support at $1,566.14, reflecting market indecision. A breakout above $1,620 could signal a bullish revival, while dropping below $1,566.14 may lead to downward pressure pushing the price lower.
Market participants are closely watching whale activity, with a previously inactive whale account reappearing to purchase a significant amount of ETH at a cost of $5.88 million. This move indicates optimism in the market conditions, with hints of more investors preparing to buy. However, there is also potential for sell pressure as Galaxy Digital recently deposited a large amount of ETH to Binance, suggesting a heightened risk of breakdown if demand falters. Ultimately, Ethereum is at a crossroads between renewed accumulation and looming distribution, with market dynamics pointing to potential price volatility.
