Ethereum’s Market Dominance Drops to Five-Year Low Analysts See Investment Potential

Summary

• Ethereum’s market dominance has plummeted to a 5-year low, signaling a potential shift in investor preference towards Bitcoin and other altcoins. However, some analysts interpret this drop as a compelling entry point for investors.

• Optimistic analysts point to historical trends where Ethereum dominance rebounds from these low levels and on-chain metrics like “supply in profit” reach bear market bottoms. They argue that the current valuation converging with realized value suggests a prime buying opportunity.

• Despite the positive signals, caution is advised due to ongoing large-scale ETH sell-offs by “whale” addresses and a significantly reduced percentage of ETH supply being profitable. Conversely, Ethereum maintains its leading position in the DApp space, and upcoming network upgrades could positively influence investor sentiment.

Recent trends indicate a notable shift in cryptocurrency investment priorities, as Ethereum (ETH) has experienced a protracted decline in market dominance over the preceding two years.

This suggests a reallocation of investor capital away from ETH, with Bitcoin and select altcoins, such as Solana and XRP, emerging as preferred destinations for digital asset funds.

This very market shift is being interpreted by a segment of analysts as a potentially advantageous entry point into the Ethereum market.

These experts suggest that the current juncture represents a unique moment for the strategic accumulation of ETH.

The question now is whether this five-year dominance nadir truly signifies a promising investment window.

Ethereum Dominance Hits a Concerning Low

Analyst Rekt Capital highlights the stark contraction in Ethereum’s dominance (ETH.D), citing a drop from 20% in June of 2023 to a current level hovering around 7.3%, having briefly touched 8% in 2025.

ETH.D, defined as the proportion of Ethereum’s market capitalization relative to the aggregate cryptocurrency market capitalization, reveals a decreasing proportion of investor interest in ETH, both historically and in comparison to the broader digital asset landscape.

Historical Support Levels Suggest Potential Reversal

Rekt Capital’s analysis includes a chart illustrating ETH.D’s interaction with a designated “green support zone.”

Historically, Ethereum’s market strength has tended to rebound from this particular zone.

This pattern raises the crucial question, posed by Rekt Capital, of whether Ethereum is poised to replicate its historical resilience and regain market share.

The analyst posits that such a potential reversal constitutes a compelling buy signal for investors.

“Can Ethereum repeat history?” Rekt Capital queries, emphasizing the historical tendency for market dominance to resurge from this specific support level.

Whale Sell-Offs Cast Shadow of Doubt

Despite the bullish outlook, a recent analysis by BeInCrypto cautions about the ongoing sell-offs by significant Ethereum holders, also known as “whale addresses.”

Data indicates that addresses possessing between 100,000 and 1 million ETH liquidated approximately 1.19 million ETH this week, equating to over $1.8 billion in value.

These substantial sales are actively contributing to the downward pressure on ETH’s price and further eroding its market dominance.

ETH Supply in Profit Plummets to Bear Market Levels

Beyond the declining dominance metric, supplementary data from Glassnode underscores a concerning trend: the proportion of the total ETH supply currently in profit has plummeted to a four-year low.

Presently, a mere 40% of the Ethereum supply is profitable, representing a dramatic reduction from the 97.5% profitability observed in early December of 2024.

Analyst Venturefounder notes the significance of this metric, suggesting that if the “supply in profit” figure descends below 30%, it would constitute an extremely rare buying opportunity, one witnessed only sparingly in the past decade.\

“The percentage of ETH supply in profit (currently at 40%) has now dipped below the level observed at the trough of the last bear market cycle (42%), when ETH traded around $800.

On-chain metrics are already suggesting it’s time to deploy capital,” Venturefounder asserts, highlighting the depth of the current market correction.

Also Read: Ethereum Outpaces Bitcoin in Becoming Global Settlement Layer Argues Analyst

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