Analyzing Ethereum's Realized Cap | Credit: Derek Fenech
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Key Takeaways
Ethereum’s (ETH) Realized Cap reached a new all-time high in July.
The MVRV Z-Score indicator has nearly given a buy signal.
How can we analyze these indicators to forecast the Ethereum price movement?
Ethereum (ETH) market cycles often share similar traits near market cycle bottoms and tops. One such trait is that the market capitalization outpaces the realized one during tops, while the opposite occurs during bottoms.
The Realized Cap is created similarly to the Market Cap, with the only difference being it computes the value when the price last moved, instead of measuring it at the current price.
When looking at the Ethereum price (black) and market cap (red), we can see that they mirror each other almost perfectly. However, the realized cap (blue) differs considerably in its movement.
Ethereum’s Realized Cap first peaked in Jan. 2022 (black circle), shortly after the price and Market Cap peaked. Then, it began a gradual decline which was much smaller than that of the ETH price.
Ethereum Realized Cap | Credit: Valdrin Tahiri/Glassnode
It is interesting that while the price and Market Cap increased in 2023 & 2024, they did not reach new all-time highs. However, the Realized Cap did in July (red) and is still near the highs.
A few things could have caused this event. The most likely is investors who bought near the 2022 bottom are selling, in turn increasing the realized cap.
This is because the current price is much higher than that of the 2022 bottom.
When the Realized Cap is well above the Market Cap, the MVRV Z-score indicator gives a buy signal, noted in the chart with a value below 0 (green). Historically, MVRV Z-Score values above 7 (red) have been indicative of market cycle tops.
Another interesting characteristic in Ethereum’s price history is that both the 2017 and 2021 market cycle tops were combined with a bearish divergence in the MVRV Z-Score indicator. This has not been the case in 2024.
On the contrary, the price moved outside its buy territory in January. Then, it reached a high of 2 in March, which was well below the cycle highs of 7.1 and 6.2 in 2017 and 2021, respectively.
ETH MVRV Z-Score | Credit: Valdrin Tahiri/Glassnode
The indicator has fallen since and is currently at 0.47, nearly reaching the buy zone.
The current reading is most similar to that in Oct. 2020 (black circle) right before the Ethereum price began to increase rapidly toward the all-time high.
Both times, the indicator reached a local top and fell toward the buy region. It remains to be seen if history will repeat.
Positive Momentum Building
Ethereum’s realized cap has outpaced the market cap since March, reaching a new all-time high in July. The MVRV Z-score indicator has fallen and nearly given a buy signal.
Compared to the previous market cycle, it most closely mirrors the period after Oct. 2020, when the ETH price rapidly accelerated toward its all-time high.
Disclaimer:
The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
Valdrin Tahiri is a cryptocurrency analyst and reporter at CCN, specializing in technical analysis with a focus on Elliott Wave theory, on-chain metrics, and fundamental research. He brings over seven years of experience in the crypto space as both a trader and writer.
He discovered cryptocurrencies in 2017 while earning his MSc in Financial Markets at the Barcelona School of Economics, which sparked a deep interest in blockchain and market dynamics. Since then, he’s contributed to top crypto outlets like BeInCrypto and CoinGape.
Valdrin also served as Community Manager of BeInCrypto’s Telegram group for three years, helping grow it into one of the largest crypto communities worldwide. His expertise in market structure and price patterns allows him to break down complex trends into clear, actionable insights.
He’s published thousands of articles covering altcoins, Bitcoin cycles, and macro trends.
