Active addresses hit cycle highs, while historical 50%+ drawdowns point toward potential V-bottom recovery dynamics.
Ethereum price has pushed decisively back above the $2,000 mark, trading between $2,060 and $2,080 after gaining more than 6% in the latest session. While the broader crypto market has turned positive, ETH’s rebound carries deeper structural implications as institutional flows stabilize and on-chain participation accelerates. The move follows weeks of pressure that saw Ethereum retest the lower boundary of its multi-month range. However, fresh ETF data, improving network activity, and historical volatility patterns now suggest the rebound may be evolving beyond a simple relief rally.
Data from U.S. spot Ethereum ETFs shows a meaningful shift in capital flows. On Feb. 13, ETFs recorded $10.26 million in daily net inflows, reversing back-to-back outflows of $129.18 million (Feb. 11) and $113.10 million (Feb. 12). Cumulative net inflows now stand at $11.65 billion, while total net assets hover around $11.72 billion. Daily total value traded reached $1.10 billion, highlighting that institutional participation remains active even amid volatility.
This shift is particularly notable given the aggressive withdrawals seen at the end of January, including a $252.87 million outflow on Jan. 30 and $155.61 million on Jan. 29. The stabilization and quick return of capital suggest repositioning rather than capitulation.
Market attention has also turned to Fundstrat’s Tom Lee, who argues that Ethereum may be setting up for another classic V-shaped rebound. His thesis is grounded in repeated historical behavior. Since 2018, Ethereum has endured eight separate drawdowns exceeding 50%, with declines ranging between -50% and -81%. In every instance, the correction eventually gave way to sharp V-bottom recoveries once leverage was flushed and macro pressures stabilized. The 2022 cycle serves as a prominent example. After collapsing more than 80% from its peak, ETH staged a powerful recovery as inflation peaked and monetary tightening expectations softened. Similar snapback rallies occurred in prior reset cycles when positioning became overly defensive.
Lee’s perspective aligns with current conditions. Sentiment recently turned cautious, price retraced significantly from highs, ETF outflows peaked late January, and now flows are stabilizing while on-chain activity strengthens. This convergence of reset positioning and improving fundamentals mirrors the early stages of prior V-shaped recoveries.
Network usage data adds another layer of confirmation. Ethereum’s active addresses have risen to cycle expansion levels, according to recent analytics. This increase in network participation has occurred even while price was correcting earlier this year. In prior cycles- notably 2017, 2020, and 2021, sustained expansions in active addresses either preceded or aligned with strong price appreciation phases.
The current divergence between rising participation and earlier price compression suggests that structural demand remained intact.
Such behavior typically reflects accumulation rather than speculative exhaustion. When network growth accelerates while price stabilizes, it often marks the early stage of a broader recovery cycle rather than a short-lived bounce.
Following a severe decline, Ethereum price has rebounded from the demand zone of $1600 and reclaimed the $2000 mark. The latest recovery is technically significant because it follows a classic liquidity sweep beneath the $1800-$2000 demand zone before aggressively reclaiming lost territory.
By reclaiming the lower boundary and pushing decisively above $2k, ETH has shifted from distribution risk back toward re-accumulation structure. The short-term moving averages are beginning to flatten and curl upward, signaling improving momentum.
In case of further upward movement, immediate resistance sits near $2200-$2450. A sustained close above the region would invalidate the lower-high structure and open the path toward $2500-$2800 where broader macro resistance aligns. On the downside, $1900 now acts as the first-line support, while $1800 remains the deeper structural defense level that must hold to preserve the bullish reset narrative.
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