A popular crypto analyst believes Ethereum (ETH) could be undervalued right now. This is based on an on-chain indicator called Entity-Adjusted Dormancy Flow.
Dormancy Flow Suggests a Bottom
Trader Ali Martinez pointed out that the Entity-Adjusted Dormancy Flow for ETH has dipped below one million. Historically, this signals a potential market bottom. According to Martinez, this suggests:
- Low investor sentiment
- Potential capitulation (selling off assets at a loss)
- Smart money accumulating ETH
The Entity-Adjusted Dormancy Flow helps determine if an asset is in a bullish or bearish trend. It essentially looks at the relationship between the market cap and how long coins have been inactive.
More Bullish Signals
Adding to the bullish case, Martinez also noted a significant outflow of ETH from cryptocurrency exchanges – around 453,000 ETH in the last five days. This large-scale movement of ETH off exchanges is often seen as a positive sign, as it suggests that large investors are accumulating the asset.
Current Price and Disclaimer
At the time of writing, ETH is trading at $1,558, up over 2% in the last 24 hours. Remember, this information is not financial advice. Always do your own research before investing in cryptocurrencies.
