TLDR
- ETH’s price touched its realized price, a level that has historically indicated market bottoms
- U.S. spot ETH ETFs have seen six consecutive weeks of outflows
- Ethereum network growth has stagnated with flat active user numbers for four years
- Several upcoming events in May 2025 could boost ETH, including the Pectra upgrade and ETH-staking ETFs
- ETH recently surged 13.7% following positive developments including SEC’s approval of options trading on BlackRock’s ETH ETF
Ethereum’s price has reached a critical juncture that historically signals market bottoms, according to analysts tracking the second-largest cryptocurrency. ETH recently dropped below $1,500, marking a two-year low and a 64% decline from its cycle peak of $4,000.
Data from CryptoQuant shows ETH touched its “realized price” – the average cost basis for most buyers – a level that has previously marked significant market shifts. Analyst Kriptolik noted, “These periods have consistently been followed by strong recoveries — making them strategic accumulation points for long-term investors.”
The chart evidence suggests similar market rebounds occurred in 2018-2020 when ETH reached this price level.
Weak Institutional Demand
Despite the potential bottom signal, institutional investors have been fleeing the asset. U.S. spot ETH ETFs have recorded outflows for six consecutive weeks, reflecting weak demand among major investors.
This extended exodus raises questions about when institutional interest might return to Ethereum.
The lack of staking yields in current ETH ETFs may be partly responsible for their underperformance compared to Bitcoin ETFs. However, changes could be coming soon.
In February 2025, Cboe filed a request with the SEC to allow the 21Shares Core Ethereum ETF to stake ETH. Similar requests followed from Fidelity Ethereum Fund and Bitwise Ethereum ETF in March.
Network Growth Concerns
Another concerning factor is Ethereum’s stagnant user growth. Analyst Stacy Muur highlighted that Ethereum active addresses have remained flat for four years.
While some argue users have migrated to Layer 2 solutions, the lack of network expansion could limit ETH’s recovery potential.
This plateau in user adoption presents a challenge for Ethereum’s value proposition as a growing ecosystem.
The network’s ability to attract new users will likely be a key metric for investors watching for signs of a sustainable price recovery.
Upcoming Catalysts
Despite current challenges, several potential catalysts could drive ETH’s price upward in the coming months.
The Pectra upgrade, scheduled for May 7, 2025, will introduce improvements to staking, deposit processing, blob capacity, and account abstraction.
Analyst Ted Pillows believes each of these events could potentially push ETH up by $1,000.
“Ethereum is currently the most hated token,” Pillows wrote, drawing parallels to Solana after it crashed to $8 before staging a remarkable recovery.
The community sentiment reflects this pessimism. One user remarked, “If you had invested $10,000 in Ethereum 7 years ago. You would still have $10,000 today.”
Yet many view the current price as a buying opportunity. An analyst emphasized that ETH is currently undervalued, with its market price below the realized price for the first time since 2020, calling it a “Generational ETH buy opportunity!”
Recent Market Response
Recent market developments have sparked optimism. The SEC’s approval of options trading on BlackRock’s iShares Ethereum ETF (ETHA) contributed to a positive price movement.
Additionally, President Trump’s decision to pause nearly all tariffs for 90 days led to a broader market recovery. Trump further encouraged investors by declaring, “This is a great time to buy!”
As a result, ETH surged by double digits. At press time, it was trading at $1,613, reflecting a 13.7% rise from recent lows.
However, the broader macroeconomic climate continues to influence crypto markets, including Ethereum. Market direction is currently dominated by macro factors that could delay a potential ETH rebound if uncertainty persists.
From a technical perspective, an extended decline to $1,000 remains possible in the short term given the current market conditions.
In summary, Ethereum has reached a pivotal price point that historically signaled bottoms, but weak institutional demand and flat network growth present challenges to immediate recovery. Upcoming technical upgrades and potential ETH-staking ETFs offer hope for price appreciation, with recent positive market responses suggesting growing optimism.
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