All kinds of data show that Ethereum is undervalued?

Editor's Note: This article comes fromCrypto Valley Live (ID: cryptovalley)Editor's Note: This article comes from

Crypto Valley Live (ID: cryptovalley)

, Author: Into The Block, Translation: Liam, reprinted with authorization by Odaily.

As ethereum approaches phase 0 of its Serenity upgrade — dubbed Ethereum 2.0 — there appears to be a wave of optimism surrounding the milestone. One of the most reported news on these fronts is that Grayscale’s ETH Trust is trading at a 700% premium to the spot price. Although this can be interpreted as a sign of institutional interest in ETH, on-chain data and indicators of derivative products can more clearly reflect the behavior of initial ETH holders. With the arrival of the early stage of ETH2.0, using IntoTheBlock's indicators allows us to draw some valuable patterns."HIOM"secondary title

IntoTheBlock's Historical In/Out of The Money Index (Historical In/Out of The Money"black thursday") to analyze the position on the blockchain using the average cost for an address by a specific token (ETH is used here). Based on this, HIOM uses some options terminology to calculate the percentage and total number of addresses that are "in-the-money" or take a profit on the position. Additionally, by comparing HIOM over time, we can identify buying and selling activity based on the number of addresses that are profiting at a particular price level.

At the time of writing, the price of ETH is around $244. The last time ETH price stayed around this level for an extended period was in early March, on March 12th

Before the price fell by 40%. At the time, 18.16 million addresses (slightly less than half the number of addresses with balances) were in the money, and 17.29 million addresses (47%) would lose money if they sold. Due to the panic caused by the new crown virus epidemic, the price of ether fell sharply, but recovered within three months.

If we compare the Historical In/Out of The Money now with what we saw in early March, there are signs of new buyers entering the market and existing addresses accumulating at lower prices. In the graph below, we can see that at an ETH price of $244, the number of addresses for the currency has increased by over 4 million in just three months:

Because the total number of addresses holding ETH also increased during this period, it indicates that new buyers entered the market in the period after Black Thursday. Additionally, the number of addresses in out-of-the-money options decreased by 1 million, indicating that some users have lost money on their positions. Ultimately, 55+% of existing ETH holders are profiting from their positions, but it could also be that many holders are accumulating ETH at a lower price, reducing the average cost.

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Another sign of ETH buying can be observed by analyzing the total number of addresses holding ETH balances. As mentioned earlier, the total number of addresses holding ETH has been increasing since March. In fact, since 2017, it has been on a continuous upward trend, as shown in the chart below:

Since the beginning of this year, 6.36 million addresses with deposits have joined the ETH network, and more than one million new addresses have been added every month. The significant growth in the number of addresses holding ETH has allowed it to surpass the number of addresses holding BTC, making ETH the only blockchain with more than 40 million addresses with balances.

IntoTheBlock categorizes steadfast holders as addresses that have been held for more than a year. The number of steadfast holders of ETH has also reached an all-time high. The number of tokens held for more than a year reached 61.27 million, which means that 55% of the 111 million ETH in circulation belong to these stalwart holders. Furthermore, despite volatility in March, the number of steadfast holders has continued to grow steadily throughout the year. With ETH 2.0 expected to enter Phase 0 this summer, these trends can be interpreted as a sign of long-term investment in the ETH blockchain.

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Perpetual Swaps Open Interest Holds at Quarterly High

Derivatives, including perpetual contracts, have become an important part of the crypto ecosystem in recent years. As derivatives have grown significantly in proportion to the spot market, their impact on token prices has come under closer scrutiny. The trend observed in ETH derivatives offerings correlates with rising institutional acceptance.

Despite the launch of the first U.S.-regulated ETH futures contract on ErisX last month, unregulated exchanges still dominate the market.

By aggregating the open interest of ETH perpetual contracts, we can observe the total dollar amount of ETH contract open interest. As the chart below shows, on June 1, the open interest in ETH perpetual contracts reached $413.5 million. Again, in terms of where on-chain metrics are headed, this is the first time this level has been reached since early March of this year.