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Ethereum has faced a difficult start to the year, falling 15% from recent local highs and falling to a low of $3,157. The altcoin leader’s decline comes as market volatility and uncertainty rise, with many investors re-evaluating their positions following the recent sell-off. However, despite the economic downturn, on-chain data suggests that underlying investor sentiment remains robust.
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Ethereum has seen significant outflows from exchanges this week, with net outflows exceeding $1.4 billion, the highest level since November, according to data from IntoTheBlock. This activity often signals a strong accumulation trend as investors move their holdings from exchanges to cold storage or other wallets, indicating long-term confidence in their assets.
These significant outflows highlight Ethereum’s resilience even amid challenging price action. Analysts are closely monitoring whether this accumulation trend can offset the bearish momentum and trigger a recovery in the coming weeks.
With Ethereum nearing a critical support level, its next move will be pivotal in determining the price direction in 2025. Since bullish seasonality in altcoins often begins after halvings, many believe that Ethereum could soon regain its upward trajectory. It will be determined by market conditions and wider macroeconomic factors.
Ethereum prepares for a rebound
Ethereum has shown signs of recovery after its recent decline and is currently attempting to break the $3,300 level. The altcoin leader faces significant challenges, including a 15% decline from recent highs, putting pressure on bullish sentiment. However, key on-chain indicators indicate that Ethereum’s fundamentals remain strong, suggesting potential growth in the coming months.
IntoTheBlock’s data shared by X highlights important developments. Net $ETH outflows from exchanges this week exceeded $1.4 billion, the highest level since November. These significant outflows are often a sign that investors are moving their holdings off exchanges, a behavior typically associated with accumulation. This trend suggests that confidence in Ethereum’s long-term potential remains intact despite recent bearish price action.
Ethereum’s recent price action may seem disappointing to some, but this accumulation trend provides a bullish basis for the asset. Historically, large foreign exchange outflows have preceded significant price increases as reduced sell-side liquidity can drive upward momentum when demand increases.
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As Ethereum works to regain higher levels, a break above $3,300 could signal the start of a more sustained recovery. With strong fundamentals and growing investor confidence, Ethereum appears well-positioned for a potentially strong 2025. However, the asset must navigate the current market volatility to confirm an upward trend.
Weekly demand testing
Ethereum is trading at $3,250, reflecting continued efforts to break the $3,300 resistance level. Price action remains tentative as ETH tests important weekly demand levels. This area has historically provided strong support, and if Ethereum closes above $3,100, it could pave the way for a meaningful rebound going forward.
The current consolidation phase highlights markets seeking direction. Ethereum will need to break above a key resistance level for the bulls to regain control. Reclaiming the $3,750 level is important to confirm a bullish breakout and signal a potential uptrend. This move will not only restore investor confidence but also allow ETH to retest higher levels as market sentiment changes.
However, failure to hold the $3,100 demand zone could result in further downward pressure and lower support levels are likely to be tested. The upcoming session will be pivotal in helping Ethereum explore these key levels.
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While broader market sentiment remains fluid, ETH’s ability to remain above critical support areas will determine whether a bullish trend emerges or whether a prolonged consolidation phase persists. Investors are closely watching ETH attempt its next significant move.
Featured image by Dall-E, chart by TradingView