Buyers are willing to pay more than three times the average price that Ether holders have paid. If the bullish trend continues, there may be an increase of up to 5 times in late May.
The price of Ether (ETH), the cryptocurrency on the Ethereum Network, recently reached an all-time high of USD 2,487. Although it has tripled since the beginning of 2020, the current speculative premium suggests a large rising margin. For that reason, the crypto asset could even be worth USD 5,000 in May.
The current price of Ether is around USD 2,460, and the realized value is USD 802. In other words, current buyers are willing to pay 3.04 times the average price that current holders have paid. Although it seems to be somewhat high, this multiple was even 6 in the last bullish market.
To get this number, it is necessary to divide the Market Value of Ether (current price of ETH) by the Realized Value. This multiple, which David Puell and Murad Mahmudov created, is called the MVRV ratio.
Could the MVRV Ratio Get to 5 at the End of May?
MVRV (Market Value to Realized Value) is a ratio of the market capitalization of an asset to its realized capitalization. It is possible to use this relationship to help evaluate the high and low values of the Ether market. Likewise, it can provide valuable information on the buying and selling behavior of traders.
If the bullish trend continues and there is a rebound in the MVRV ratio, it may reach a multiple of 5 by the end of May. Since there are more buyers in the market, the realized price could increase over time. In the last month alone, it has been possible to see an increase of 15.1%.
In other words, when projecting it through to the end of May, the Realized Price could rise by 26.43% to around USD 1,014 per Ether. For that reason, this could result in a market price of USD 5,070 per unit in the case of a multiple of 5.
There Have Been Various Predictions about Ether (ETH)
The aforementioned projections are a real possibility, especially when Ether and Bitcoin have regularly reached new all-time highs. However, there are no guarantees about price and time targets.
At the beginning of the year, Bitcoin trader Josh Olszewicz set a short-to-medium-term price target for Ether at USD 780. Another short-term prediction by Simon Dedic, co-founder of Blockfyre, saw Ether reaching USD 800.
However, the bullish scenario is very likely to occur even though there is still a lot of work to do. Of course, many consider a price of USD 5,000 for Ether at the end of May to be insane.
Renowned experts have indeed made predictions about the prices that cryptocurrencies could reach. However, investors need to do their research to make more accurate decisions that will help them achieve higher returns.
By Alexander Salazar