Ethereum Nearing Cyclical Low This Week, Says Tom Lee

Tom Lee, co-founder of Fundstrat, suggests that Ethereum is nearing a cyclical low based on on-chain fundamentals and its valuation relative to Bitcoin. He believes Ethereum could bottom this week due to:

The role of Ethereum as neutral infrastructure for tokenization and stablecoins, crucial as Wall Street seeks to tokenize assets like stocks, bonds, and real estate.
Crypto's volatility being linked to market valuation of long-term innovation rather than fundamental weakness.
A broader risk-off environment and ongoing correction across digital assets.

Lee emphasizes two structural "floor" mechanisms for Ethereum:

The growing value of assets locked on the Ethereum blockchain. Historically, Ethereum bottoms when the ratio of locked assets is about 50%.
Ethereum's valuation relative to Bitcoin, with a current price ratio of 0.032. If Ethereum were to reach its eight-year average ratio, it would be valued at approximately $12,000.

Overall, Lee views Ethereum as undervalued compared to Bitcoin, supported by an intrinsic floor from the value of assets locked onto the Ethereum blockchain. At press time, ETH traded at $3,018.

Ethereum price