The world’s second-largest cryptocurrency Ethereum (ETH) is on a continuous downtrend ever since hitting its all-time high of $4400 last month. The ETH price is down more than 60% from its ATH and is currently trading under $1900 levels as of now.
While investors have been panicking with the recent ETH price drop, these on-chain indicators from Santiment suggest that it might be a good buying opportunity at this stage as ETH looks slightly undervalued at this point.
The 30-day average MVRV (market-value-to-realized-value) ratio for ETH is currently at -17% Which means that the risks associated with buying afresh are less than normal. When the MVRV ratio is high, it means the asset is overvalued and under selling pressure. While if the value is low, it means the asset is undervalued.
On the other hand, Santimnet notes that it’s the right time for the ETH bulls to capitalize on the FUD. It notes that the weighted social sentiment for Ethereum has been at historic low levels. Thus, it brings a great potential opportunity to buy against the masses.
Drop In ETH Average Fees and Hashrate
The Ethereum average fees have been dropping considerably over the last few months after hitting new highs earlier this year. As per Santiment, the Ethereum average fees is at its lowest point since December 2020. The on-chain data provider notes that this gives more flexibility for investors to move their funds.
On the other hand, amid the Chinese crackdown and miners shutting down their operations, the ETH hashrate has come dropping down, just like Bitcoin. On the other hand, there are some signs of caution as well! The number of Ethereum active addresses is consistently moving down while the ETH deposits at exchanges have remained high. As Santiment reports, since the May 2021 high, the Ethereum deposits at the exchanges have moved to their all-time high.