Ethereum [$ETH] has been cheap since February, as it was trading below its overall cost basis at $2.3k. More holders were at a loss, and the recent rally to $1,920 and subsequent reset lower meant sellers still have the upper hand in the market.
AMBCrypto reported that the realized price bands meant a price drop to $1.15k is possible if the 2022 bear market cycle plays out once more.
Though it can be considered cheap, spot ETF outflows of $70.7 million on Friday, the 24th of July, broke a five-trading-day streak of inflows that began on the 16th of July. Stalled momentum could be a warning of a bearish trend continuation, AMBCrypto warned.
Some on-chain metrics suggested organic growth and reduced speculative froth.
THESE signals point to reduced Ethereum downside risk
XWIN Japan observed that Exchange Reserves fell from 5 million $ETH in mid-2025 to 3.8 million at the time of writing. This signals both accumulation from holders and easing selling pressure in the market.
Additionally, the market price is below the realized price, setting up favorable conditions for long-term investors to buy the leading altcoin on the cheap.
However, XWIN Japan noted that falling Exchange Reserves, by themselves, do not confirm a final market bottom.
Over the past quarter, Ethereum has been quiet, wrote crypto analyst Crypto Onchain. Median transaction fees were 92% below the 90-day average, for example. Yet, over the past week, these fees rose by 16%.
New smart contract deployment surged 190% compared to the 90-day baseline. Median tip fees also rose 86%. The increased contract deployment and tips pointed to genuine short-term on-chain demand and activity.
Leverage remained subdued. Funding rates were cooling on Binance, and Open Interest has dropped from $15.06 billion at the start of June to $11.85 billion at press time.
If the short-term uptick in activity is sustained, while leverage is under control, a price uptick driven by organic demand could be viable.
Final Summary
- Compared to its realized price, Ethereum remains cheap, and falling exchange reserves pointed to steady accumulation.
- Uptick in smart contract deployment and median tips over the past week, alongside subdued leverage, was something investors can keep an eye on.
