Is Ethereum dead? Fidelity: The landscape has shrunk, and everyone has underestimated the second brother!
In the first quarter of 2025, the cryptocurrency market is experiencing extremes. While Bitcoin has pulled back, it has managed to hold its ground, Ethereum, on the other hand, has slid down a slippery slope, plummeting 45% in just three months, closing at $2,246. This not only broke through important moving averages but also created a spine-chilling 'death cross' that led to an uproar of voices claiming 'Ethereum is dead'.
However, a report released by Fidelity Digital Assets has prompted everyone to reassess Ethereum. Fidelity analyzed four key charts that indicate that while Ether seems to be in free fall, it is actually a prime entry point for long-term investors.
Historical experience suggests that this is often a signal for a price bottom; the unrealized profit and loss metrics also show that Ether has entered a 'surrender' zone, indicating severe market sell-offs and widespread losses among participants, which also suggests that the market is about to bottom out. In the past, every time it entered this zone, Ether experienced a significant rebound.
Looking at the relationship between Ethereum network activity and price, although network activity has decreased at the moment, historical data shows that this is merely a temporary phenomenon. As new applications continue to emerge and technology upgrades take place, a recovery in network activity is just a matter of time. Furthermore, an analysis of the cost basis distribution among Ether holders indicates that a large number of investors are in a state of loss, and this 'painful' phase is typically a precursor to a price reversal.
Despite the poor short-term price performance, Ethereum's long-term fundamentals remain strong. It continues to be the primary platform for DeFi, NFTs, and Layer 2 scaling solutions, with a continuously expanding ecosystem and a robust technology roadmap. Fidelity predicts that as market sentiment warms up and the network fundamentals recover, Ether's price is expected to return to a growth trajectory in the coming quarters, with a target price that could exceed $3,000.
Don’t be disturbed by short-term fluctuations; focus on Ethereum's technological upgrades and ecosystem development. For those who can bear the risks, now may be a good time to increase Ether allocations. In cryptocurrency investing, the best long-term investment opportunities often lie hidden during the most pessimistic times, and Ethereum right now may very well be in this severely undervalued 'potential stock' state.
