Ethereum (ETH), the second-largest cryptocurrency in the world, is navigating rough waters in early 2025. With signs of a potential 10% price drop, many investors and traders are questioning whether the bearish signals will prevail or if a rebound is on the horizon.
Ethereum’s performance has been underwhelming in recent weeks. The cryptocurrency has struggled to maintain momentum, with its price declining steadily since December 2024. A breakdown of key support levels has added to the negative sentiment, as ETH’s price failed to recover and even retested its breakdown points, turning them into resistance.
This bearish pattern is not limited to Ethereum. Other major cryptocurrencies like Bitcoin (BTC), XRP, and Solana (SOL) have also experienced similar downward trends, reflecting broader market challenges.
Analyzing Ethereum’s price charts reveals that the cryptocurrency could face further losses. Based on historical price movements and the current bearish sentiment, ETH might drop by 10%, potentially reaching the $2,850 mark.
However, not all indicators point to doom and gloom. Ethereum’s Relative Strength Index (RSI) is nearing the oversold territory, which could signal an upcoming recovery. Additionally, the 200 Exponential Moving Average (EMA) indicates that ETH is technically still on an uptrend.
This mix of signals has created uncertainty, leaving investors unsure whether the price will rebound or decline further.
Despite some optimistic technical indicators, traders remain hesitant to bet on Ethereum’s recovery. Data from on-chain analytics platform CoinGlass shows that the long/short ratio for ETH stands at 0.94, highlighting a bearish bias among traders.
As of now, 52.67% of top traders hold short positions, betting on a price drop, while 47.33% hold long positions. Interestingly, Open Interest in Ethereum has risen by 4.5% in the last 24 hours, indicating increased activity from traders expecting short-term volatility.
While short-term traders exhibit caution, whales and long-term holders seem to be taking a different approach. On-chain data reveals that over $21 million worth of ETH has been withdrawn from exchanges in the last 24 hours.
Such significant outflows often indicate accumulation by large investors, as they move their holdings off exchanges to private wallets. This could create buying pressure in the market, potentially offsetting some of the bearish sentiment.
The current market scenario is a mix of bearish and bullish factors. On one hand, Ethereum’s downtrend and cautious trader sentiment suggest the potential for further losses. On the other hand, whale accumulation and technical indicators like the RSI hint at the possibility of a rebound.
For Ethereum to recover, a significant shift in market sentiment or a broader crypto market rally may be necessary. Until then, the price remains at risk of further declines, with $2,850 being a critical level to watch.
The coming days will be crucial for Ethereum’s price trajectory, making it essential for investors to stay informed and vigilant about market developments.
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