Original Author: Biraajmaan Tamuly
Original Translation: 深潮 TechFlow
Key Takeaways:
Fidelity Digital Assets' report indicates that multiple on-chain metrics for Ethereum show that ETH is trading below its valuation.
BTC/ETH market cap ratio has returned to mid-2020 levels.
The number of active addresses on Ethereum's Layer 2 networks has reached a new high of 13.6 million.
New data from Fidelity Digital Assets suggests a cautiously optimistic outlook on Ethereum, indicating that its poor performance in the first quarter may present an opportunity. According to their latest Signals Report, Ether (ETH) fell 45% in the first quarter, erasing gains made after the U.S. elections, where it peaked at $3,579 in January.
The price of Ether saw 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 may turn favorable for Ether.
The investment firm noted that the MVRV Z-Score (a comparison of market value to intrinsic value) fell to -0.18 on March 9, entering the 'undervalued' range. Historically, this level often marks a market bottom, suggesting that Ether appears 'cheaper' compared to its 'fair value.' The net unrealized profit/loss (NUPL) ratio also fell to 0, indicating a 'surrender' state where unrealized profits equal losses, suggesting holders are in a neutral position.
Ethereum's MVRV Z-score
Source: Fidelity Digital Assets Signal report
The actual price of ETH averages $2,020, 10% higher than its current value, indicating that holders are facing unrealized losses. While this trend is bearish, the firm pointed out that the actual price has only slightly decreased by 3% compared to the 45% decline, suggesting that short-term holders have sold off while long-term holders remain steadfast, potentially stabilizing the underlying price.
However, the company emphasized that in 2022, although the ETH price dropped below its intrinsic value, it continued to decline further before rebounding.
Fidelity also cited the market cap ratio of Ethereum to Bitcoin at 0.13, which is at mid-2020 levels and has declined over 30 months.
Ethereum/Bitcoin Market Cap Ratio
Source: Fidelity Digital Assets Signals report
Ethereum ecosystem participation hits a new high
Data from growthepie.xyz shows that the number of unique addresses interacting with Layer 1 or Layer 2 networks within the Ethereum ecosystem has reached a historical high of 13.6 million. The proportion of active addresses has increased by 74% over the past week, indicating network scalability and growing adoption.
Weekly interactions of Ethereum with Layer 2 networks
Source: growthepie.xyz
Uniswap's new Layer 2 protocol Unichain leads with over 5.82 million weekly active addresses, surpassing Base and Arbitrum. The collective increase in active addresses has boosted Ethereum's dominance in the Layer 2 network by 58.74% over the past seven days.
Anonymous crypto trader CRG pointed out that the ETH price has recovered above the 12-hour Ichimoku cloud indicator for the first time since December 2024. The Ichimoku cloud indicates an upward trend when the price is above the cloud and the cloud turns green, suggesting bullish sentiment.
Ethereum 12-hour analysis provided by CRG
Source: X.com
This article does not contain investment advice or recommendations. Every investment and trading action involves risks, and readers should conduct their own research before making decisions.
