Is Ethereum Near a Cycle Low? New Metric Points to Accumulation Phase

Ethereum may be trading below its true value right now, according to a new market signal catching the attention of crypto analyst Ali Martinez.

Crypto analyst Ali Martinez has spotted a new market signal that may indicate Ethereum is currently trading below its fair value.

According to Martinez, the Entity-Adjusted Dormancy Flow just dropped below the one million mark, a level that has previously coincided with long-term market bottoms.

This metric, which is used to determine if an asset is oversold, combines low investor activity with strong coin holding behavior. Essentially, when coins are dormant and market cap remains high, it may indicate that most holders are choosing not to sell, which is usually a sign of confidence among long-term investors.

This drop in the Dormancy Flow below one million may be a sign that Ethereum has reached a major accumulation phase. It also signals weak market sentiment, potential capitulation, and buying activity from more strategic players, often referred to as smart money.

According to data from Glassnode, Dormancy Flow helps investors identify macro trends by comparing a coin’s market cap to how long those coins remain inactive. When that flow dips sharply, it often aligns with price bottoms and signals that the market may be preparing for a long-term shift upward.

This analysis aligns with recent reports of large-scale ETH withdrawals from centralized exchanges. Over the past five days alone, nearly half a million ETH (453,000 coins) have been pulled from exchanges, which is usually seen as a bullish sign. It suggests that investors are planning to hold their ETH rather than engaging in short-term trades or selling.