Ethereum (ETH) May Be Trading Below Its Fair Value

Ethereum (ETH), the second largest asset in the cryptocurrency market, may be trading below its fair value. The assessment is based on one of the on-chain indicators considered key by technical analysts to detect market bottom zones.

In a post shared on X, cryptocurrency analyst Ali Martinez assessed that Ethereum (ETH), the second largest asset in the crypto market, may be trading below its fair value.

The assessment is based on one of the on-chain indicators considered key by technical analysts to detect market bottom zones.

According to the expert, the Adjusted Dormancy Flow index has recently fallen below one million. This level, based on historical patterns, usually indicates that the asset’s price has entered a potential macroeconomic bottom.

#Ethereum Entity-Adjusted Dormancy Flow just dropped below 1 million. This historically indicates a macro-bottom zone, meaning $ETH might be undervalued and long-term holders are less inclined to sell. It also suggests:

• Sentiment is low

• Capitulation may have occurred

•… pic.time domainix.com/8mFc3Qdxoy

— Ali (@ali_charts) April 11, 2025The metric analyzes the relationship between Ethereum’s market capitalization and its annualized dormancy value in dollars, offering clues about long-term holder behaviors.

As the indicator hits this type of low, it typically signals a reduction in selling activity by older, more experienced investors in the market.

Martinez shared the analysis with his more than 135,000 followers on the X platform, where he noted that the current environment could indicate three main factors: pessimistic sentiment among participants, the possibility that the capitulation phase has already occurred, and a scenario favorable to the entry of institutional capital.

Another piece of data that reinforces this reading involves the recent movement of ETH on exchanges.

According to the analyst, around 453.000 units of Ethereum were withdrawn from exchanges in the last five days, which may signal a long-term storage strategy, reducing selling pressure and decreasing the circulating supply. This also indicates that the price of Ethereum may rise again.

At the time of publication, the price of Ether was quoted at $1.612,63, up 3,8% in the last 24 hours.