NUPL & MVRV Reach Crucial Levels: Ethereum (ETH) On-Chain Analysis

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In Brief
  • NUPL for ETH is still above 0.5.

  • It reached a yearly high in January.

  • MVRV is holding above the 1.9 support.

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In this article, BeInCrypto will take a look at on-chain indicators for Ethereum (ETH), more specifically Net Unrealized Profit/Loss (NUPL) and Market Value To Realized Value (MVRV).

NUPL

NUPL is and indicator that divides unrealized profits with unrealized losses. It measures the hypothetical profit/loss for investors if all coins were to be sold at the current time.

The indicator reached a yearly high of 0.77 in January (black circle) This can be seen as a sign of an overheated market.

Afterwards, it fell twice below the 0.5 threshold (red circles), which at the time was seen as a sign of weakness, since it indicated a weakening trend.

ETH
Chart By Glassnode

Previously, decreases below the 0.5 levels (black circles) have marked the end of the bull run. Therefore, it is crucial that the indicator manages to hold on above this level. 

ETH NUPL
Chart By Glassnode

MVRV

MVRV is an indicator that simply measures the ratio between the market and realized capitalization levels. It is used to determine if an asset is priced near its fair value. 

High readings can be considered signs of tops, indicating that the market is overbought. Similarly, low readings can be considered signs of bottoms, showing an oversold market.

Historically, the 1.9 level seems to have acted as support for ETH. This was the case in July and Sept 2017, since both the indicator and price bounced after a low close to 1.9 was reached (black circles). Therefore, the reading was associated with a local low prior to the continuation of the upward movement. 

Afterwards, the level acted as resistance on Aug 2020, before turning to support afterwards (black line). There is a significant deviation on July 2021, but the level was reclaimed shortly afterwards. 

Currently, MVRV is trading just above this level and could potentially initiate a bounce. 

Similarly to the 0.5 level in the NUPL, the 1.9 level in MVRV is very significant, and it is crucial that ETH stays above it for the bullish trend to remain intact.

MVRV movement
Chart By Glassnode

For BeInCrypto’s latest Bitcoin (BTC) analysis, click here

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.
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Valdrin discovered cryptocurrencies while he was getting his MSc in Financial Markets from the Barcelona graduate school of Economics. Shortly after graduating, he began writing for several different cryptocurrency related websites as a freelancer before eventually taking on the role of BeInCrypto's Senior Analyst.

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