Ethereum: Here’s how the market bought and sold ETH in Q1

• ETH’s exchange outflows totaled $4 billion in Q1 of 2024
• MVRV ratio suggested the coin was trading slightly below its realized value

According to data released by IntoTheBlock, Ethereum [ETH] outflows from cryptocurrency exchanges totaled $4 billion in the first quarter of the year. This signals a surge in coin accumulation by market participants over the 90-day period, despite the 10% decline in ETH’s value after it peaked at $4065 on 11 March.

The altcoin’s rally above $3500 towards $4000 between 4 and 19 March triggered a wave of sell-offs. This contributed to a hike in its exchange reserves, with a year-to-date (YTD) assessment of the coin’s reserves revealing a 5% decline.

This decline showed that ETH accumulation significantly outpaced distribution during the quarter. 

Source: CryptoQuant

ETH on-chain in Q1

Between January and March, the number of ETH wallet addresses holding between 100 and 100,000 coins fell by 2%, according to Santiment. This underlined a decline in ETH holding by its investor cohort, known to be market movers. 

At press time, 45,623 wallet addresses held between 100 and 100,000 ETH. These addresses currently hold 36% of ETH’s circulating supply. 

Conversely, during the period under review, the number of shrimp addresses holding between zero and 100 ETH coins climbed. As of 31 March, their number was 118.25 million, up 6% during the year’s first quarter. At the time of writing, this category of ETH holders controlled 10% of the coin’s supply. 

Also, the surge in ETH’s price above $3500 in Q1 led to a spike in its Market Value to Realised Value (MVRV) ratio. 

Read Ethereum’s [ETH] Price Prediction 2024-25

This metric measures when an asset is overvalued or undervalued. When its ratio is high and on an uptrend, it suggests that an asset’s market value has exceeded its realized value. When this happens, most asset holders will be in profit.

Conversely, when an asset’s MVRV ratio declines, it is deemed to be undervalued relative to its realized value. Investors who choose to sell their holdings at this point during the market cycle often do so at a loss.

ETH’s price rally to $4000 on 11 March pushed its MVRV ratio to a YTD high of 138.38%. 

Source: Santiment

Although ETH’s MVRV ratio also declined after its price fell from its peak, it closed the quarter with a value of 107%. Below 100% at press time, ETH’s MVRV ratio showed its price was slightly below the average price at which all coins were last moved on-chain