Is Ethereum Undervalued? A Close Look at Realized Price and Institutional Activity

Ethereum's price has been stuck in a consolidation phase, struggling to gain upward momentum amid the broader crypto market's bearish sentiment. A recent analysis by CryptoQuant contributor MAC_D highlights the challenges faced by Ethereum's "ultrasound money" narrative, including record-high total supply and a 1% decrease in staking ratio since November. Despite these supply-side hurdles, the analysis suggests that Ethereum might be positioned for long-term growth due to several demand-side factors. One key insight is that Ethereum appears undervalued based on its realized price, with a market value to realized value ratio slightly above 1, indicating that ETH remains undervalued relative to historical norms. This level could act as a strong support base, potentially limiting further downside. The analysis also highlights the behavior of long-term holders, who are accumulating Ethereum without selling, similar to Bitcoin's "permanent holders." Selling pressure in the futures market has eased, with a notable reduction in market price trading volume on the sell side since November. Institutional participation is another encouraging factor, with major players such as BlackRock accumulating substantial amounts of ETH during the recent downturn. While the analysis acknowledges lingering challenges, including the increase in total supply and the slight dip in the staking ratio, the combination of undervaluation, strong long-term holder participation, reduced selling pressure, and institutional accumulation paints a more optimistic medium- to long-term outlook. Overall, Ethereum may continue to trade sideways in the near term, but the factors outlined in the analysis suggest that it could be well-positioned for growth once broader market conditions stabilize.