On-Chain Indicator Suggests Ethereum (ETH) Could Be Undervalued, According to Crypto Analyst
An on-chain indicator suggests that top smart contract protocol Ethereum ( ETH ) could currently be undervalued, according to a popular crypto analyst.
Trader Ali Martinez tells his 135,100 followers on the social media platform X that ETH’s Entity-Adjusted Dormancy Flow just dropped below one million, suggesting that Ethereum may be in the midst of carving a major cycle bottom.
“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
• Smart money might be accumulating”
Source: Ali Martinez/X Entity-Adjusted Dormancy Flow is used “to time market lows and assess whether the bull market remains in relatively normal conditions,” according to the crypto analytics firm Glassnode . The metric, which Glassnode says helps clarify whether an asset is in a bullish or bearish primary trend, measures the ratio of a coin’s market cap and its annualized dormancy value tracked in US dollars.
Martinez also notes that 453,000 Ethereum have been withdrawn from crypto exchanges in the past five days.
Source: Ali Martinez/X Large amounts of ETH flowing out from exchanges can serve as a bullish indicator as deep-pocketed investors accumulate the asset.
ETH is trading at $1,558 at time of writing, up over 2% in the last 24 hours.
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