Ether sentiment hits yearly low but that signals a rebound

Key Points

• Ether sentiment hits yearly low, per Santiment
• Historically, extreme bearish sentiment signals a market bottom
• Institutional investors are still accumulating ETH despite the dip
• Ether could see a strong rebound if crypto markets stabilize

Social media discussions around Ether (ETH) have reached their most negative levels in a year, according to blockchain analytics firm Santiment. While this might seem concerning, past trends suggest that such bearish sentiment often precedes major price recoveries.

Santiment’s sentiment tracker, which analyzes mentions of Ether across platforms like X, Reddit, and Telegram, found that traders are significantly more bearish on ETH than on other major cryptocurrencies.

Ether sentiment was bullish during a broader crypto bull market last ye,ar but that has since shifted to bearish. Source: Santiment – Techtoken

This shift comes as Ether’s price has dropped over 20% in the last month, now trading around $2,176, while Bitcoin (BTC) has seen a comparatively smaller decline of 10% in the same period.

But some analysts argue that this negativity could be a buy signal. Douro Labs CEO Mike Cahill noted that sentiment usually follows price movements—not the other way around.

“Extreme bearish sentiment has often coincided with market bottoms,” he explained. If the broader crypto market stabilizes, Ether could be well-positioned for a strong comeback, driven by renewed liquidity and institutional interest.

🐻 Ethereum sentiment has declined to year-low levels as the asset has underperformed relative to other top caps. For those patiently holding their $ETH, the bearishness being projected across social media is a good sign of a potential turnaround once crypto markets stabilize. pic.twitter.com/iRaKTvb0Tu

— Santiment (@santimentfeed) March 6, 2025

Institutional players still betting on Ether

Despite Ether’s underperformance, institutional investors appear unfazed. One major player, Trump-backed World Liberty Financial (WLFI), recently increased its ETH holdings by $10 million over a seven-day period. This suggests that long-term confidence in Ethereum remains strong, even as short-term sentiment turns negative.

Dominick John, an analyst at Kronos Research, believes that interest rate cuts or clearer ETH staking regulations could trigger a sharp rebound.

He pointed out that ETH’s MVRV Z-Score, a key indicator for assessing whether an asset is over- or undervalued, has hit its lowest level in 17 months. Historically, when ETH’s MVRV Z-Score drops this low, it has preceded significant price rallies—including a 160% surge in late 2023.

Key indicators suggest a potential ETH comeback

Several on-chain metrics indicate that Ether may be nearing a price bottom. Historically, a drop in social sentiment and MVRV Z-Score has been followed by strong rebounds. Additionally, while Ethereum’s network activity has declined, institutional players still accumulate, signaling long-term confidence.

Other factors contributing to the decline in sentiment include falling total value locked (TVL) in DeFi platforms and concerns over Ethereum’s supply emissions. However, the fact that institutional players are still buying ETH suggests that smart money may be positioning itself for the next major rally.

While Ether’s price struggles in the short term, historical trends and institutional moves indicate that this negative sentiment may be the perfect setup for a comeback. If crypto markets stabilize, ETH could be among the biggest beneficiaries.