Ether Price Enters ‘Belief Zone’ Following $5K All-Time Highs

Key takeaways:

• Ether’s long-term holder net unrealized profit/loss indicator suggests the price has entered the “belief” phase.

• The market value to realized value suggests ETH is undervalued, with room to run toward $5,500.

• Ether’s rounded bottom pattern targets $12,100.

Ether (ETH) price has rallied more than 240% since April to set a record high above $5,000 on Sunday. As a result, investors’ profitability has risen to levels seen in the past bull cycles, suggesting that the ETH market is entering the “belief” phase, increasing the chances of an extended rally.

Ethereum investor sentiment in “belief”

Onchain data points out similarities between the current stage of the Ether market and previous bull cycles. 

Ether’s long-term holder (LTH) net unrealized profit/loss (NUPL) indicator has entered the “belief-denial” (green) zone, a position that historically precedes significant price rallies, said popular analyst Gert van Lagen in an X post on Monday.

The LTH NUPL measures the difference between the relative unrealized profit and relative unrealized loss of investors who have held Bitcoin for at least 155 days. 

Related: Bitcoin whales swap BTC for Ether as trader sees ETH at $5.5K next

This zone is particularly significant because it suggests ETH has not yet reached the euphoric phase (blue) typically associated with cycle peaks. 

In previous market cycles, the transition from belief to euphoria has coincided with substantial price increases.

For that to occur, ETH price “still needs to climb further,” van Lagen explained, adding:

“$10K and $20K $ETH are not unimaginable.”

The market value to realized value (MVRV) ratio adds another layer of validation to the bullish thesis. With a current daily reading of 2.08, significantly lower than a peak of 3.8 in 2021 and 6.49 in 2017, the metric suggests Ethereum remains relatively undervalued. 

This lower MVRV ratio indicates subdued profit-taking and increased potential for sustained price appreciation.

Ether’s MVRV extreme deviation pricing bands also suggest that ETH price still has more room for further expansion before the unrealized profit held by investors reaches an extreme level represented by the uppermost MVRV band at $5,500, as shown in the chart below.

ETH price analysts target $10,000 and beyond

But the price can go even higher from a…