Ethereum’s dominance has plummeted to 7.3%, a five-year low, raising investor concerns. Analysts suggest this decline presents a buying opportunity, reflecting historical trends that often precede rebounds. Recent data shows significant selling by whale addresses, leading to lower prices and caution among investors. Despite challenges, Ethereum remains a leader in DApps, and upcoming upgrades may enhance its market position.
Ethereum (ETH) is currently facing a downturn, with its market dominance plummeting to 7.3%, a level not recorded in the last five years. This trend reflects a shift of investor capital towards Bitcoin and other altcoins like Solana and XRP. Notably, some analysts perceive this drop as a potential buying opportunity, indicating that historically low dominance levels may precede a market resurgence for Ethereum.
The decline in Ethereum’s dominance has been consistent over the past two years, dropping from approximately 20% in June 2023 to its current level of 7.3%. This suggests a weakening position in the cryptocurrency market. Analysts such as Rekt Capital consider this downturn a potential buying signal, as the current dominance level coincides with historical support zones where Ethereum has previously regained momentum.
Additionally, Ethereum’s price has also decreased in tandem with its waning dominance. This situation is exacerbated by significant selling from wealthy Ethereum addresses. Recent data reveals that holders with between 100,000 and 1 million ETH have liquidated roughly 1.19 million ETH, valued at over $1.8 billion. These sales have not only led to a price drop but have also contributed to a cautious market among investors.
Several experts suggest that the current market conditions may present a unique buying opportunity for ETH. Historical precedents show that when Ethereum’s dominance has hit low points, it is often followed by a substantial rebound. CryptoAnup noted that the current dominance appears to have bottomed out, hinting at an upcoming recovery for Ethereum.
Furthermore, there has been a significant decline in the percentage of Ethereum supply being held at a profit. According to data from Glassnode, only 40% of the ETH supply is currently profitable, a drop from 97.5% in December 2024. While this indicates losses for many holders, some analysts, like Venturefounder, argue that falling below 30% typically signals a potential buying opportunity.
In conjunction with declining dominance, Ethereum’s market value has aligned with its on-chain realised value, often indicative of a forthcoming rebound. Historically, when these values converge, it creates a favourable buying climate that precedes price increases.
Despite these challenges, Ethereum remains the leading platform for decentralised applications (DApps). In Q1 2025, DApp fee revenue on the Ethereum network exceeded $1 billion, showcasing its enduring strength in this sector. Furthermore, analysts remain optimistic about Ethereum’s future due to forthcoming upgrades aimed at improving network efficiency.
The Pectra and Fusaka upgrades, scheduled for May and late 2025 respectively, are anticipated to enhance Ethereum’s scalability, speed, and functionality. These developments could bolster investor confidence and market dominance, potentially paving the way for price increases.
In conclusion, while Ethereum faces a five-year low in dominance and a corresponding price drop, multiple indicators suggest this may be an opportune time to acquire ETH in anticipation of a rebound. Its leadership in the DApp domain and imminent network upgrades suggest promising prospects for long-term growth, positioning Ethereum well despite short-term challenges.
