Ethereum's Price Drops 55% in a Year, Analysts See Potential Bottom

Coin WorldSaturday, Apr 12, 2025 8:37 am ET
1min read

Ethereum's price may be approaching the end of its capitulation phase, according to renowned crypto analyst Ali Martinez. In a recent post, Martinez highlighted that Ethereum’s Entity-Adjusted Dormancy Flow has fallen below one million, a metric historically linked to Ethereum bottoms. This indicator suggests that Ethereum might be undervalued and that long-term holders are less likely to sell, signaling a potential macro bottom zone. Martinez explained that this metric compares Ethereum’s market cap to its dormancy value, adjusted for unique entities rather than raw addresses, indicating low sentiment and possible accumulation by "smart money."

Despite Ethereum's price dropping over 55% in the past year and currently trading around $1,557, analysts are beginning to see signs of a potential price bottom. CryptoQuant collaborator theKriptolik noted that ETH has fallen below its Actual Price, a metric showing the average acquisition cost across the blockchain. This drop points to the Ethereum capitulation phase but also signals strategic accumulation opportunities for long-term holders. Martinez warned that ETH could dip as low as $1,200 if selling pressure persists. However, another analyst, NotWojak, suggested that ETH might be on the verge of a breakout, potentially reaching $1,835. The on-chain data suggests possible recovery, but analysts are divided on Ethereum's short-term growth path.

Ethereum commenced trading yesterday at $1,520 and displayed horizontal range-bound behavior for most of the day. A slight uptrend formed early in the day with a golden cross on the MACD around 1:00 UTC, taking Ethereum on a slow uptrend up to $1,577. However, as it approached resistance, the RSI reacted by venturing close to the overbought zone, followed by a trend reversal. This pattern continued throughout the day, with Ethereum testing the $1,588 resistance at 17:40 UTC. With the RSI now overbought, a downtrend ensued, but Ethereum established a higher support at $1,546. As of the latest update, Ethereum has formed an uptrend within the range, looking for an upward breakout.

The RSI's quick reaction to upward pressure makes it challenging for the Ethereum price to break out. However, if the uptrend continues and Ethereum can break the resistance, a trading range near the resistance level may be established. If buyers support further movement, a slow uptrend with some corrections could follow. Conversely, if the bears take control, Ethereum will seek a nearby support level. The current market sentiment and on-chain data suggest cautious optimism, with potential accumulation by "smart money" and historical patterns indicating a possible recovery. However, the short-term price action remains uncertain, with analysts divided on Ethereum's immediate growth prospects.