Ethereum has surged past the $2,000 mark, indicating its first return above a key psychological support level since August 2022. This rise comes as Bitcoin hits a new milestone, crossing $30,000.
While some are skeptical of the longevity of this rally, others remain optimistic and anticipate further growth. Traders are keeping an eye on Ethereum’s MVRV rates, which show a higher risk of a potential drop in the short term, but heavy profits and stability in perpetual contract funding rates are keeping traders optimistic.
The crypto analytical platform Santiment shared a Twitter post citing the substantial development in Ethereum’s performance:
🥳 #Ethereum's price has officially crossed $2k for the first time in 8 months, and the trading crowd's level of #FOMO will have a big impact on whether it continues to climb from here. Our latest insight breaks down $ETH whales, profit taking, & more. 👇 https://t.co/QMO70q4UeQ pic.twitter.com/gaX4kYU6LK
— Santiment (@santimentfeed) April 13, 2023
While the 30-day MVRV sits at 9.95%, indicating a higher risk of a potential drop, the 365-day MVRV is +29%, signaling that traders are generating heavy profits, with less pain required for prices to rise. With perpetual contract funding rates currently stable and Deribit (a leading cryptocurrency futures and options exchange) showing wild volatility swings between shorts and longs, traders remain optimistic that ETH will continue to rise.
According to experts, keeping an eye on average trading returns is important as Ethereum is a zero-sum trading game, just like other assets. However, the risk of a correction is not too high yet, as the 30-day MVRV rate is at 9.95%, which is not quite at the level where traders should be extremely concerned.
On a long-term basis, Ethereum’s 365-day MVRV rate is +29%, the highest it has been since December 27, 2021, which is giving investors a cause for worry. Nevertheless, traders are currently enjoying heavy profits, which is not typically a sign that prices would continue to rise.
