Ethereum Enters Most Bullish Phase of Its Cycle According to These Models

Key Takeaways

• The Block Subsidy and Mayer Multiple models can determine Ethereum’s fair value.
• The Block Subsidy model suggests Ethereum has begun its rapid growth period.
• The Mayer Multiple model also indicates Ethereum is in its expansion phase.

Ethereum’s (ETH) two previous market cycles have shared many similarities.

Near its top, the Ethereum price diverged well above its thermocap and moving averages, while it did the opposite at its bottom.

Block Subsidy and Mayer Multiple models can help visualize Ethereum’s position relative to these indicators.

Let’s dive into them and see what lies ahead for ETH.

Block Subsidy Model

The Block Subsidy Model helps price an asset by comparing its value to the cost of production, also known as the thermocap. The model uses the thermocap and its multiples to show if the asset is more valuable than its production cost and by how much.

The high for Ethereum’s first cycle was at the 64 multiple of the Thermocap (red), while the second cycle high was at the 32 multiple (purple).

This shows a trend of diminishing returns during each cycle, which has been common in the cryptocurrency market.

While not certain, this could mean that this cycle’s high will be reached at the 16 multiple (yellow).

Currently, the Ethereum market cap trades between the 8 and 16 multiples. historically, the most rapid portion of the upward movement began once the Ethereum price broke out above the 8 multiple.

Therefore, the reading of Ethereum’s Block Subsidy Model suggests that the price has further room to grow. Assuming a constant supply, we can convert the market cap values from the thermocap multiple to an ETH price.

The 8 multiple is at $5,716, the 16x multiple is at $11,433, and the 64x multiple is at $22,875.

Therefore, even if we assume that the diminishing returns will hold this cycle, the ETH price will likely reach a new all-time high.

Mayer Multiple Model

The Mayer Multiple Model uses a 200-day moving average (MA) and creates upper and lower bands to determine if the asset’s price is overbought or oversold.

In previous market cycles, highs (black circles) were reached above the 2.4 multiplier of the 200-day MA (red).

In the current cycle, ETH has fallen below the 0.8 MA multiplier (green) twice in June 2022 and September 2024 (green circles).

This is similar to how it acted in the previous cycle when it fell below the multiplier for the second time in March 2020 before beginning the parabolic portion of its upward movement.

The 2.4 multiplier is at $7,200. If it follows previous history, ETH will reach a new all-time high above this level.

Ethereum’s price crossed the MA twice in both previous cycles before eventually reaching the top.

Ethereum’s Rally Begins

The Mayer Multiple and Block Subsidy models suggest that Ethereum has room to grow. Additionally, their readings mimic the previous cycle before Ethereum’s rally became parabolic.

The combination of these two models suggests the likely area for a top is between $7,200 and $11,433.