Ethereum (ETH) has experienced a tough February, struggling to break free from a market-wide downturn. As the cryptocurrency enters March, it’s facing rising concerns about supply pressures and market sentiment. However, there could also be an opportunity for investors willing to look beyond the current challenges and consider a potential rebound.

Rising Supply and Its Impact on Price

One of the primary concerns for Ethereum as it heads into March is the increasing circulating supply of the cryptocurrency. Over the past 30 days, Ethereum’s circulating supply has expanded by 66,350 ETH tokens, which are worth approximately $138 million at current prices. When more tokens enter the market, and demand doesn’t keep pace, the increased supply can put downward pressure on prices. The added liquidity from the growing circulating supply, without enough new buyers, creates a situation where Ethereum faces difficulties in sustaining upward momentum.

The growth in circulating supply also coincides with another worrying trend: the increase in ETH held on exchanges. Ethereum’s balance on exchanges has risen by 2% over the past week. When more ETH is held on exchanges, it usually signals that investors are preparing to sell, which often leads to a negative impact on the price. The combination of rising supply and increased selling activity has contributed to the bearish sentiment surrounding Ethereum, with many traders awaiting signs of recovery before making any substantial moves.

Market Sentiment and the Ongoing Downturn

Ethereum has also been impacted by a broader market downturn in recent weeks. Various global factors, including the effects of Donald Trump’s trade policies, have contributed to increased market uncertainty, causing ETH to hit multi-month lows. The overall bearish sentiment has created a challenging environment for Ethereum to regain its footing, leaving investors cautious and hesitant to buy into the asset.

Ethereum’s price has struggled to find strong support above key levels, leading to a sense of uncertainty among traders. If the general market trend continues, Ethereum may face further declines in the short term. The rising exchange balances and growing sell-side liquidity suggest that bearish pressure could persist in the coming weeks unless a significant shift in market sentiment occurs.

Rebound Potential: A Buying Opportunity?

Despite the ongoing challenges, some analysts believe that the current price levels of Ethereum could present an excellent buying opportunity, particularly for long-term investors. Analyst Brian Quinlivan from Santiment points out that both short-term and long-term Ethereum holders are deeply in the red, which is rare for top cryptocurrencies. Historically, periods when a significant portion of holders is underwater have often been followed by major price rebounds, as institutional investors and whales tend to accumulate during times of low prices.

Quinlivan notes that Ethereum’s underwhelming performance in 2023 and 2024 compared to other altcoins and top-tier assets could make it one of the better-performing cryptocurrencies in 2025. As the market eventually turns in favor of ETH, those who accumulate during this period could potentially see significant returns in the future.

What to Expect in March

Looking ahead to March 2025, Ethereum’s price will likely continue to face pressures from rising supply and exchange-held ETH. However, the current market conditions could present an opportunity for long-term investors to acquire Ethereum at discounted prices. The ongoing bear market might soon give way to a more favorable environment for ETH, particularly if large buyers begin accumulating at these lower levels.

Ethereum’s potential for a price rebound will depend on how well it manages these supply and sentiment issues. If Ethereum can overcome the bearish pressures and secure stronger support, it could set the stage for a rally later in the year. However, in the short term, Ethereum may continue to be constrained by supply-side pressures, making March a critical month for anyone considering entering or exiting the market.

In summary, while Ethereum faces a series of challenges in March 2025, the potential for a recovery remains. Traders and investors will need to monitor the evolving market dynamics to understand the true direction of ETH in the near future.