Ethereum price action amid the broader crypto market bearish sentiment over recent weeks hasn’t been any different from the performance recorded in the past months. Over this period, Ethereum’s price has struggled to gain significant upward momentum, remaining in a prolonged consolidation phase.

Amid this, a recent analysis by CryptoQuant contributor MAC_D has shed light on Ethereum’s current state and factors that may influence its future price trajectory. The analysis notes that Ethereum’s “ultrasound money” narrative—an idea tied to its post-Merge deflationary tokenomics—has faced challenges.

Total supply has reached record highs, and the staking ratio has decreased by 1% since November. However, despite these supply-side hurdles, several demand-side factors suggest Ethereum might be positioned for long-term growth.

One other key insight from the analysis is that Ethereum appears undervalued based on its realized price. The realized price reflects the average acquisition cost of ETH holdings across all wallets, currently sitting at approximately $2,200.

With the current market price around $2,600, the analyst calculates a market value to realized value (MVRV) ratio slightly above 1, indicating that ETH remains undervalued relative to historical norms. This level could act as a strong support base, potentially limiting further downside.

Another factor supporting Ethereum’s potential upside is the behavior of long-term holders. The analysis highlights an increasing number of addresses that accumulate Ethereum without selling, akin to Bitcoin’s “permanent holders.”

Although some larger investors have sold during recent downturns, their positions have been absorbed by these long-term holders, helping stabilize the market. This trend suggests that Ethereum’s investor base is maturing, with a growing segment committed to holding the asset through market volatility.

Furthermore, the analyst points out that selling pressure in the futures market has eased. Data shows a notable reduction in market price trading volume on the sell side since Ethereum’s price near $4,000 in November last year.

This decline in selling activity, even as prices fell, signals a relative influx of buying power, which could set the stage for a recovery if market conditions improve.

Institutional participation is another encouraging factor. Major players, including BlackRock, Cumberland, and other prominent firms, have reportedly accumulated substantial amounts of ETH during the recent downturn.

For example, BlackRock is said to have purchased over 100,000 ETH, valued at more than $270 million. Such significant institutional inflows not only boost demand but also lend credibility to Ethereum’s long-term investment thesis.

Despite these positive indicators, the analysis acknowledges lingering challenges. The increase in total supply and the slight dip in the staking ratio could weigh on sentiment, particularly if macroeconomic conditions remain uncertain.

Moreover, Ethereum’s price movement may remain constrained in the short term as the broader market digests ongoing economic shifts. However, the combination of undervaluation, strong long-term holder participation, reduced selling pressure, and institutional accumulation paints a more optimistic medium- to long-term outlook.

While Ethereum may continue to trade sideways in the near term, the factors outlined in the analysis suggest that it could be well-positioned for growth once broader market conditions stabilize.

Featured image created with DALL-E, Chart from TradingView

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