Key Takeaways: Fidelity Digital Assets’ report said that multiple Ethereum onchain metrics suggest ETH trades at a discount.The BTC/ETH market cap ratio is at mid-2020 levels. Ethereum's layer-2 active addresses hit new highs at 13.6 million. Fresh data from Fidelity Digital Assets hints at a cautiously optimistic outlook for Ethereum, suggesting its dismal Q1 performance could be an opportunity. According to their latest Signals Report, Ether (ETH) dipped 45% during Q1, wiping out it post-US election gains after peaking at $3,579 in January.The altcoin posted a death cross in March, with the 50-day simple moving average (SMA) dipping 21% below the 200-day SMA, reflecting bearish momentum. Yet, Fidelity noted that the short-term pain may swing in the altcoin’s favor. The investment firm pointed out that the MVRV Z-Score, which compares market value to realized value, dropped to -0.18, entering the "undervalued" zone on March 9. Historically, such levels have marked market bottoms, indicating that Ether “was looking cheap” compared to its “fair value.” The Net Unrealized Profit/Loss (NUPL) ratio also fell to 0, indicating "capitulation," where unrealized profits equal losses, citing a neutral spot for holders. Ethereum MVRV Z-score. Source: Fidelity Digital Assets Signal reportETH’s realized price, averaging $2,020, sits 10% above its current value, showing holders face unrealized losses. While this trend is bearish, the firm noted that a minor 3% drop in realized price versus a 45% decline suggests short-term holders sold off, while long-term holders held firm, possibly stabilizing the base price. However, the company highlighted that in 2022, despite ETH price dipping below the realized price, it continued to decline further before recovery. Fidelity also cited Ethereum’s market cap ratio to Bitcoin at 0.13, sitting at mid-2020 levels, and in a decline for 30 months.Ethereum/Bitcoin market cap ratio. Source: Fidelity Digital Assets Signals reportRelated: Ethereum price has several reasons to break $2,000 nextEthereum ecosystem engagement records fresh highsData from growthepie.xyz indicated that the number of unique addresses interacting with one or two layer 2 networks in the Ethereum ecosystem reached a new all-time high of 13.6 million active addresses. The rate of active addresses is up 74% over the past week, implying the network’s scalability prowess and growing adoption. Ethereum’s weekly engagement with layer 2 networks. Source: growthepie.xyzUnichain, a new layer-2 protocol by Uniswap, led the charge with over 5.82 million weekly active addresses, surpassing Base and Arbitrum. The collective increase in active addresses improved Ethereum’s layer-2 dominance by 58.74% in the past seven days. Anonymous crypto trader CRG noted that ETH price recovered a position above the 12-hour Ichimoku cloud indicator for the first time since December 2024. The Ichimoku Cloud indicates an uptrend when the price is above the cloud and the cloud turns green, indicating bullish sentiment.Ethereum 12-hour analysis by CRG. Source: X.comRelated: Global central bank gold rush could spark Bitcoin price run to new all-time highsThis article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

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