Ethereum (ETH) Dips to Undervalued Zone as Whales Reposition Holdings

• Ethereum (ETH) enters an undervalued phase as whales actively trade to lower their cost basis, increasing accumulation but delaying a rally.
• The Market Value to Realized Value (MVRV) ratio signals ETH is underpriced, yet quick profit-taking and market uncertainty limit significant price movement.
• The accumulation of 19M ETH in DeFi continues to be essential yet market trust faces challenges from the network development pace, along with profit withdrawals.

Ethereum (ETH) maintains a current trading position around $2,200 which points to possible undervaluation according to previous market performance. ETH recovered from a previous dip beneath $2,000 yet strong market sell-offs continue making prices unstable. Whale traders have actively managed their positions over the past three months, strategically selling at local tops and re-buying at lower levels to achieve a reduced cost basis.

Active Whale Trading Reshapes ETH Market Trends

Large holders initially accumulated ETH at $3,500 before offloading their positions and re-entering the market near $2,500. This cycle of strategic selling and re-buying helped whales lower their cost basis to around $3,200. Recently, traders capitalized on a local top at $2,500, selling before repurchasing at a reduced price. This pattern has contributed to ETH’s price weakness as rallies are often met with immediate distribution.

ETH is now approaching undervalued levels based on its Market Value to Realized Value (MVRV) ratio. A ratio below 1 typically indicates a chance to buy near the average purchase price of market participants. While this suggests an accumulation opportunity, analysts warn that a sustained rally remains uncertain due to continued bearish sentiment and market hesitancy.

Accumulation Grows as ETH Holds Key Utility in DeFi

Despite price fluctuations, ETH continues to flow into accumulation addresses, reinforcing its role within the decentralized finance (DeFi) ecosystem. In January, Ethereum saw a peak inflow into accumulation addresses, with over 19 million ETH now held. While ETH’s accessibility makes it a popular asset, whales have refrained from holding long-term, favoring short-term trades instead.

The realized price for staked ETH currently sits at $2,775, placing some stakers at a loss. Analysts note that $2,800 could act as a significant resistance level where large holders may sell. A recovery above this threshold could drive renewed momentum, benefiting the ETH DeFi ecosystem by strengthening loan security and liquidity incentives.

Market participants doubt Ethereum’s long-term future because they are skeptical about its network expansion potential. Major DeFi projects continue to work on the blockchain but investors view the Ethereum Foundation’s methods as difficult to understand, and this leads to lesser adoption and market value growth. ETH’s bullish momentum remains weak because of this, which resulted in price recovery slowing down so traders remain hesitant about market conditions.