Ethereum (ETH) Could Be Undervalued Based on These Key On-Chain Metrics

Key Takeaways

• The Mayer Multiple and MVRV Pricing Bands help price Ethereum.
• The MVRV Pricing Bands indicator shows consolidation before expansion.
• The Mayer Multiple model shows Ethereum’s undervaluation in this cycle.

The current Ethereum market cycle has been different from the previous two, especially because ETH has not reached a new all-time high yet while Bitcoin (BTC) has nearly doubled its previous high.

Nevertheless, all hope is not lost yet. The MVRV Pricing Bands and Mayer Multiple models indicate the price is undervalued and has yet to begin the most bullish portion of its cycle.

Let’s dive deep and see what they suggest is in store for Ethereum in 2025.

MVRV Pricing Bands

The Market Value to Realized Value (MVRV) indicator helps determine if an asset is over- or undervalued by comparing its market value to realized value, the latter of which is considered the asset’s fair value.

The pricing model uses bands to determine extreme unrealized profit or loss. A period of extreme loss (blue) happens when the MVRV is below 0.8 for 5% of trading days, while that of extreme profits (red) occurs when the MVRV is above 2.4 for 6% of the trading days.

In the 2017-2018 cycle, Ethereum crossed above this band twice (black arrows) before the end of the market cycle.

It only did so once in 2021 (red arrows). The ongoing cycle is the most subdued since Ethereum has not crossed above it yet.

However, the consolidation is somewhat similar to those in 2017 and 2021 (black circles) right before the ETH increase accelerated.

While the period of consolidation has been longer than in both previous cycles, it is not so different from them as to completely invalidate the bullish Ethereum similarity.

For the similarity to remain valid, the price mustn’t cross below the 0.8 band again.

Mayer Multiple Model

The Mayer Multiple Model uses moving averages to determine if Ethereum is overbought or undersold. More specifically, it uses the price’s relationship to its 200-day MA (blue) by creating a 2.4 (red) and 0.8 (green) multiple of the 200-day MA.

Historically, the Ethereum market cycles top when the price crosses the 2.4 multiple and bottoms below the 0.8 multiple. The ETH price has crossed the 2.4 multiple every cycle except the current one.

While the price crossed its 200-day MA several times, it never mustered enough strength to cross the 2.4 multiple.

There is an interesting similarity between the 2019-2020 movement (black line) and the current one (brown). More specifically, the pattern goes as follows:

1. The ETH price falls below its 0.8 multiple.
2. It then increases above it and the 200-day MA.
3. The price falls below the 0.8 multiple but creates a higher low.
4. The next increase above these levels marks the start of the bull run.

ETH is completing step four in this pattern. However, it is imperative that the price begins an upward movement soon since another decline below the 0.8 multiple will invalidate the pattern.

Is Ethereum Undervalued?

Ethereum’s Mayer Multiple Model suggests the asset is still heavily undervalued. In fact, the readings resemble those of 2020, right before the price started a massive bull run.

The MVRV pricing band shows a similar fractal of consolidation that previously led to a rapid increase.

It is worth mentioning that these two indicators are at complete odds with others, such as the NUPL and Realized Price to Liveliness ratio, which suggest Ethereum’s market cycle has ended.

Thus, on-chain readings are uncertain about Ethereum’s current stage in the cycle.