SKN | Analysts Split on Whether Ether Has Capitulated or Faces Further Downside

Key Points

• Ethereum’s MVRV Z-Score has fallen to -0.42, a level associated with capitulation, but still above historic bear-market extremes.

• Some analysts warn that further downside is possible before a structural bottom forms.

• Others argue current valuations represent one of the strongest long-term “buy fear” opportunities for ETH in multiple cycles.

Ether is flashing signals historically associated with market capitulation, but analysts remain divided on whether the second-largest cryptocurrency is nearing a durable bottom or still has room to fall. The debate centers on Ethereum’s MVRV Z-Score, a widely followed on-chain metric that has slipped into negative territory as prices slide.

Ethereum’s MVRV Z-Score recently fell to around -0.42, a level typically linked to periods of heavy selling and investor stress. The indicator compares Ethereum’s market value with its realized value  the aggregate price at which ETH last moved on-chain — and is designed to identify moments of euphoria or capitulation when the gap between the two becomes extreme.

Ether has fallen roughly 30% over the past two weeks, dropping to a bear-market low near $1,825 on Friday before rebounding modestly to around $2,100 by Monday. The sharp decline has pushed valuation metrics into zones that, in past cycles, often preceded major turning points.

Capitulation Signals, but Not Extreme

Joao Wedson, founder and CEO of Alphractal and an analyst at CryptoQuant, said the current reading suggests Ethereum is undergoing a clear capitulation phase. However, he cautioned that the intensity of the move does not yet match the deepest bottoms of prior bear markets.

“The data shows that Ethereum is indeed going through a clear capitulation process,” Wedson said, noting that the lowest MVRV Z-Score on record was -0.76, reached in December 2018. By comparison, the 2022 cycle lows also saw materially deeper negative readings than today.

From that perspective, Wedson warned that further downside cannot be ruled out. “Historically, there is still room for further downside before a definitive structural bottom is formed,” he said, particularly if macro and market stressors remain unresolved.

Fundamentals Versus Price Action

Others argue that focusing solely on price and sentiment risks missing the bigger picture. Tim Sun, senior researcher at HashKey Group, said Ethereum’s MVRV Z-Score has historically been a reliable guide for identifying bottoming zones, but stressed that it should be read alongside fundamentals.

“Judging by on-chain activity, protocol evolution, and long-term ecosystem structure, Ethereum’s fundamentals have not seen any substantive deterioration,” Sun said. He added that metrics tied to network usage and development continue to trend positively, even as prices weaken.

Still, Sun echoed the view that calling a final bottom may be premature. As long as the primary drivers of the current sell-off  including broader risk-off sentiment and declining liquidity  remain in place, Ethereum could continue to chop or retest lower levels before stabilizing.

A Classic “Buy Fear” Setup?

More optimistic voices see the current valuation as a rare opportunity. MN Fund founder Michaël van de Poppe described the setup as one of the best “buy fear” windows for Ether in recent years, pointing to what he views as a significant gap between market price and fair value implied by on-chain data.

Ether is now as undervalued, by MVRV standards, as it was during several historic stress events: the December 2018 bear-market bottom, the March 2020 COVID crash, the June 2022 lows following the Terra/Luna collapse, and the April 2025 drawdown. In each case, prolonged weakness was eventually followed by sharp recoveries.

That pattern is reinforced by Andri Fauzan Adziima, research lead at Bitrue, who said negative MVRV zones have repeatedly preceded explosive rebounds in prior cycles. With Ethereum’s network metrics holding up, he views the current phase as a long-term accumulation setup once leveraged and short-term sellers are fully flushed.

Waiting for Confirmation

The divergence in views highlights the challenge facing investors: valuation metrics suggest Ether is cheap relative to history, but macro conditions and market structure argue for caution. Capitulation, when it arrives, often looks obvious only in hindsight.

For now, Ethereum appears caught between improving fundamentals and fragile sentiment. Whether the recent lows mark the start of a bottoming process or merely a pause before another leg down will likely depend on how quickly fear subsides — and whether buyers step in with enough conviction to absorb remaining supply.