ETH trades near fair value territory as price recovers to $3,000 territory

$ETH is trading near fair value territory after recovering to just over $3,000. $ETH remained more active and speculative compared to BTC, but still not showing signs of a hyped-up rally.

$ETH realized price and the market value/realized value ratio indicate a fair price for the asset at the end of November. $ETH traded at $3,053.19, moving sideways in the past few days.

Realized price stands at $$2,315, with a MVRV ratio of 1.27. This means that the market price is just 27% above the realized price. At this price level, $ETH is not considered overbought or oversold, falling into the neutral category.

The $ETH fear and greed index also reflects neutrality, with a value of 49 points. The current level does not guarantee future price moves. At this point, $ETH is not overheated and historically does not point to a local top. However, the market remains at risk for further corrections, with lower liquidity and anticipation of selling pressure.

$ETH is anticipating its Fusaka update on December 3, but otherwise lacks directional hype. The $ETH network posts peak activity, but just like previous seasons, it has not reflected the growth directly. The current price range also continues without the hype of an altcoin season. $ETH is showing mid-cycle indicators, with the potential for more sideways trading or unexpected moves, but no clear top signal.

Is $ETH shifting its market structure?

Data on Binance measures a slightly different MVRV ratio just below 1. This threshold value may signal a shift in investor behavior. If the ratio drops below one, it may signal a local bottom, but also price weakness and sideways trading.

Historically, an MVRV ratio above 3 signals more exuberance and overbought conditions. Values below one mean investors carry unrealized losses.

$ETH has the advantage of being accumulated for years, as whales have also actively tried to lower their acquisition price.

$ETH exchange reserves are declining

$ETH reserves on exchanges sit at an all-time low, signaling almost no readiness for spot selling. $ETH relies on derivative trading, which has accelerated in recent days.

$ETH exchange reserves keep sinking to new all-time lows as holders shift to lending, staking, or DeFi. | Source: Cryptoquant

Long-term holders and whales also prefer to retain their coins for staking or use them for DAT companies. Trading has shifted to wrapped tokens, and $ETH is widely used as a lending collateral. All of this decreases the need to put $ETH directly on centralized exchanges.

Binance holds around 3.87M in $ETH, while exchanges carry 16M $ETH, down from 20M in July. At the same time, $ETH is moving into accumulation wallets, and some is sent into the Beacon chain contract for staking.