An analysis from Fidelity Digital Assets indicates that several on-chain indicators suggest that the price of ETH has bottomed out and is undervalued.
Recent data from Fidelity Digital Assets suggest a cautiously optimistic outlook for Ethereum, indicating that its poor performance in the first quarter could be an opportunity. According to their latest Signals Report, Ether
$ETH 1578 € fell 45% during the first quarter, wiping out post-election gains in the U.S. after reaching a peak of $3,579 in January.
The altcoin recorded a death cross in March, with the 50-day simple moving average (SMA) falling 21% below the 200-day SMA, reflecting bearish momentum. However, Fidelity noted that short-term pain could work in favor of the altcoin.
The investment firm highlighted that the Z-score of MVRV, which compares market value to realized value, fell to -0.18, entering the "undervalued" zone on March 9. Historically, such levels have marked market bottoms, indicating that Ether "seemed cheap" compared to its "fair value." The Net Unrealized Profit/Loss (NUPL) ratio also fell to 0, indicating "capitulation," where unrealized gains equal losses, signaling a neutral point for holders.
The realized price of ETH, averaging $2,020, is 10% above its current value, showing that holders are facing unrealized losses. Although this trend is bearish, the firm pointed out that a smaller drop of 3% in the realized price compared to a 45% decrease suggests that short-term holders sold, while long-term holders remained firm, possibly stabilizing the base price.
However, the company highlighted that in 2022, even though the price of ETH fell below the realized price, it continued to decline before recovery.
Fidelity also cited Ethereum's market capitalization ratio to Bitcoin at 0.13, situated at mid-2020 levels, and declining for 30 months.
The commitment of the Ethereum ecosystem records new highs.
Data indicated that the number of unique addresses interacting with one or two layer 2 networks in the Ethereum ecosystem reached a new all-time high of 13.6 million active addresses. The active address rate has risen by 74% in the last week, implying the scalability of the network and growing adoption.
Unichain, a new layer 2 protocol of Uniswap, led the advance with over 5.82 million weekly active addresses, surpassing Base and Arbitrum. The collective increase in active addresses improved Ethereum's layer 2 dominance by 58.74% over the past seven days.
The anonymous cryptocurrency trader CRG noted that the price of ETH regained a position above the 12-hour Ichimoku cloud indicator for the first time since December 2024. The Ichimoku cloud indicates a bullish trend when the price is above the cloud and it turns green, signaling bullish sentiment.
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