- Ethereum’s dormancy flow drops below 1 million for the first time since 2022, signaling accumulation and long-term holder conviction.
- Historically low dormancy levels in April 2025 mirror past cycle bottoms, hinting at capitulation and potential macro trend reversal.
- Despite price fluctuations, long-held ETH remains unmoved, suggesting accumulation and renewed confidence among long-term investors.
According to analyst Ali’s analysis, Ethereum’s Entity-Adjusted Dormancy Flow has dropped below 1 million for the first time since mid-2022, signaling a critical macro trend. As of April 10, 2025, the dormancy flow stood at 979,317 while ETH traded at $1,521.85. Historically, such low dormancy levels have coincided with market bottoms, where long-term holders exhibit low spending behavior. This suggests Ethereum may currently be undervalued, and accumulation could be underway.
Besides that, the drop also reflects a potential shift in investor sentiment. Dormancy flow levels this low previously occurred in December 2018 and June 2022. On both occasions, ETH traded at major cycle lows of $84.32 and $993.84, respectively. Hence, the latest drop mirrors historical patterns and indicates that capitulation might already have occurred. Smart money could be quietly positioning for the next cycle.
Dormancy Flow vs Price Action
From 2018 to 2025, Ethereum’s dormancy flow followed a descending trajectory with consistently lower highs and lower lows. Meanwhile, ETH’s price moved in cyclical waves. It peaked in early 2018, again in 2021, and once more in mid-2024. However, each time dormancy flow failed to reclaim previous highs, it suggested weakening conviction from long-term holders.
Moreover, in the bull run between 2020 and 2021, both metrics surged. ETH price and dormancy flow aligned, pointing to heightened on-chain activity. Conversely, from late 2021 onward, the trend reversed. While ETH’s price briefly recovered in 2023 and early 2024, dormancy flow kept falling. This divergence highlighted that long-held coins remained largely unmoved despite rising valuations.
Long-Term Sentiment Signals
Additionally, dormancy flow acts as a sentiment gauge for long-term investors. High values typically reflect profit-taking or distribution phases. On the other hand, historically low values hint at accumulation and subdued spending behavior. This current phase fits the latter profile, as fewer aged coins move despite price swings.
Consequently, the Ethereum on-chain pattern indicates that it may be in an accumulation zone. A more extensive corrective phase may be coming to a conclusion in the market. This trend foreshadows significant uptrends and mimics previous cycle lows.. While short-term volatility remains, the dormancy flow signals growing conviction among long-term holders.
