Ethereum (ETH) has faced a significant downturn in recent weeks, with the cryptocurrency dropping 36% over the past seven weeks. This price decline has caused widespread concern among investors, with many retail traders rushing to sell their positions. Ethereum, as the second-largest cryptocurrency by market cap, has struggled to keep pace with the performance of other major cryptocurrencies, raising questions about its future prospects.

Despite the recent drop, there is an important shift happening behind the scenes that could signal a potential rebound. A historic outflow of Ethereum from exchanges suggests that investors with long-term perspectives are preparing for the next big move in 2025.

Record Exchange Outflows – What Does This Mean?

One of the most significant events for Ethereum recently was the massive outflow of ETH from exchanges. On February 8 and 9, over 224,410 ETH were withdrawn, marking the largest single-day outflow in nearly two years. This shift is notable because large withdrawals from exchanges often signal that investors are holding their positions long-term, which typically reduces the available supply for trading. This, in turn, can reduce selling pressure and may pave the way for price increases.

After this historic outflow, Ethereum’s price saw a brief 3.5% jump, rising from $2,850 to $2,950 within just 24 hours. This movement suggests that the market may be starting to stabilize, with investors confident in Ethereum’s long-term value despite the recent price downturn.

Ethereum’s Network Activity Picks Up

In addition to the large exchange outflows, Ethereum’s network activity has been on the rise. The number of active Ethereum addresses jumped by 8%, reaching 500,000. This increase indicates more engagement and interest in the Ethereum network, which could support future price growth.

Ethereum’s trading volume also surged during this period, with Binance processing over 1.2 million ETH, and total trading across all platforms hitting $3.4 billion. The uptick in network activity and trading volume further suggests that investors are increasingly confident in Ethereum’s potential, particularly for the long term.

What the Technicals Show Us

Looking at the technical indicators, Ethereum’s price action appears promising. The Relative Strength Index (RSI) is sitting at 65, indicating healthy momentum without being overbought. Additionally, the Moving Average Convergence Divergence (MACD) indicator has shown a bullish crossover, which suggests that the upward momentum could continue in the near future.

Ethereum’s Bollinger Bands also signal higher volatility, with ETH testing the upper band. The increased volatility suggests that Ethereum could see larger price swings in the short term, which could lead to a rebound if the momentum continues.

Is a Rebound Coming?

Crypto analyst Ali Martinez has pointed out that Ethereum’s TD Sequential indicator has flashed a buy signal on both the weekly and daily charts, further strengthening the outlook for a price rebound. This indicator suggests that Ethereum could be primed for a rally in the coming weeks, particularly given the growing investor confidence and positive technical signals.

While the recent price decline has raised concerns, the combination of increased network activity, record exchange outflows, and bullish technical indicators suggests that Ethereum is preparing for a potential rebound. Investors will be closely watching these signals, as a recovery in Ethereum’s price could lead to a new upward trend for the cryptocurrency in 2025.

Conclusion

Although Ethereum’s price has experienced a sharp decline recently, the underlying signals point to potential for future growth. The historic movement of ETH off exchanges indicates that investors with long-term views are confident in the asset’s future. Additionally, rising network activity and promising technical indicators suggest that Ethereum could soon reverse its downward trend. As investor confidence continues to grow, Ethereum may be poised for a price rebound in the coming months.