Ethereum (ETH) Price Attempts to Stabilize After Dipping Below $1600

input: Ethereum price is attempting to stabilize after dipping below $1,600. Long-term holders have entered capitulation territory for the first time in months.

Ethereum (ETH) price has been attempting to stabilize after dipping below the crucial $1,600 psychological support amid a surge in user activity and on-chain whale movement.

However, this downward pressure has pushed long-term holders into capitulation territory for the first time in months, signaling a potential shift in market sentiment.

As the cryptocurrency attempts to find a footing, analysts believe that ETH price could be approaching a turning point that may trigger the long-awaited breakout from the 18-month ranging market.

One analyst, known as CryptoELITES on X (formerly Twitter), has projected a bullish roadmap for Ethereum, forecasting a $5,000 price target by May 2025 after the final shakeout.

The analyst highlighted a historical pattern of accumulation followed by a steep expansion phase.

Ethereum has encountered strong support at the $1,800 level, with the price rebounding multiple times from this zone.

According to CryptoELITES, the ongoing decline is the final shakeout before the price embarks on a parabolic expansion.

The projected path aligns with previous cycles where similar consolidation zones preceded explosive breakouts.

If this roadmap plays out, ETH could rally significantly once the 2021 all-time high (ATH) is cleared.

The chart vividly split the structure into a bottoming phase, currently in progress, followed by projected upside momentum, aiming for new all-time highs.

By pegging Ethereum's potential to transition into a new bullish phase, CryptoELITES highlighted a long-term opportunity despite the short-term volatility.

On-Chain Metrics Signal Capitulation and Value

In other developments, on-chain metrics suggest that experienced holders, known as Long-Term Holder Net UnProfitable Participants (LTH-NUPL), have entered capitulation territory.

This metric turning red is a rare occurrence and has historically marked the final stages of a bearish phase.

As LTHs begin to surrender, it often sets up the stage for a trend reversal.

This observation aligns with the behavior of the MVRV Long/Short Difference, which has plunged to -22.26, indicating that ETH price is massively undervalued.

Again, such levels are typically seen at times of maximum pain and have marked ideal accumulation zones in past cycles.

Such conditions usually create opportunities for strategic investors to rotate out of low-yielding assets and into crypto.

An uptick in large transactions, often linked to whale activity, was also observed last week, with over 530,000 ETH being transferred between major wallets.

One notable event was the sale of 10,702 ETH by a dormant 2016-era wallet, which previously sold only during major corrections, hinting at an effort to trigger panic before recovery.

Despite Bearish Sentiment, User Activity Surges

Despite the falling price and LTH capitulation, Ethereum network activity has seen a remarkable spike.

Daily active addresses reached 573,000, and transaction volume hit 1.42 million on April 9, the highest since November 2021.

This increased activity during market stress suggests a rise in network utility and interest at lower valuations.

Notably, both metrics shot up to new all-time highs this year at the beginning of 2024, signaling that even during downturns, Ethereum is still drawing attention.

The uptick in transactions also speaks to greater adoption, possibly with new users entering at perceived bargain levels.

It reflects confidence in Ethereum's long-term prospects beyond short-term trading.

The case of user engagement supports the establishment of a reversal.

It can be noted that the seasonal increase in user activity corresponds to macro accumulation phases when prices are low.

The correlation of the user interest and undervaluation metrics indicates that the ETH might be in the process of developing a bottom.

Moreover, according to crypto analyst TedPillows, the $1.3K–$1.6K range is a generational entry point for Ethereum.

The analyst highlighted three stages: accumulation, manipulation, and expansion.

According to his analysis, the top altcoin price has exited the accumulation zone and is now undergoing a final manipulation phase.

He further noted that institutional adoption is being driven and the market capitalization of stablecoins is massively growing.

Thus, there is bearish pressure at the best possible level, and this is another typical sign of a bottoming formation.

When they are put together, his outlook aligns with the notion that ETH is about to swing to a bullish trend.