Author
Steve Muchoki
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Key Notes
- The Ethereum network has faced significant competition from other L1 chains seeking to dominate the DeFi ecosystem.
- Ether price could drop below $3K again before kickstarting the next major altseason.
Less than 48 hours to the close of the first month of 2025, it is more evident that short-term sellers are in control of Ethereum price ETH $1 917 24h volatility: 2.1% Market cap: $230.63 B Vol. 24h: $12.69 B action. The large-cap altcoin, with a fully diluted valuation of about $384 billion and a 24-hour average trading volume of about $24 billion, has been trapped in a falling wedge pattern since mid-December 2024.
With Bitcoin BTC $84 331 24h volatility: 3.3% Market cap: $1.67 T Vol. 24h: $29.90 B dominance approaching 60% for the first time in 2025, the ETH/BTC pair has continued to shed in the macro time frame. After retesting a crucial support level above $3,040 in the past few days, which coincided with the 50-weekly Moving Average (MA), Ether’s price is now signaling a potential bullish breakout toward a new all-time high shortly.
Ethereum Price Faces Short-Term Selloff
According to crypto analyst Ali Martinez, Ether’s MVRV recently dropped below the 160-day MA, thus increasing a potential 40% drop below the $3K support level. A similar short-term bearish sentiment has been highlighted by crypto analyst Benjamin Cowen, who noted that Ether price will continue to drop fueled by the ongoing Quantitative Tightening (QE).
As a result, Ether price is likely to drop towards the support range between $2,230 and $2,610, where nearly 12 million traders purchased over 62 million ETH.
The short-term bearish sentiment for Ether will, however, be invalidated if the altcoin consistently closes above the key resistance level of around $4K in the near term. Furthermore, Ether price has been forming a potential reversal pattern characterized by a triple top coupled with a bearish divergence of the weekly Relative Strength Index (RSI).
Ether Whales Feel the Pressures
The Ethereum network is the largest Web3 ecosystem, with a total value locked of about $64 billion and a stablecoins market cap of around $117 billion. However, the growing dominance of other layer one chains – led by Solana (SOL), Ripple Labs’XRPL, Toncoin (TON), and Tron (TRX), among others – has threatened to dethrone the Ether network.
Consequently, Ethereum whales have accelerated the rate of profit distribution to other blockchains. Moreover, the Donald Trump administration has vowed to help the entire cryptocurrency grow exponentially in the near future.
According to on-chain data analysis provided by Glassnode, long-term Ether investors have started to feel anxiety after being extremely bullish in the last three months. Furthermore, the US spot Ether ETFs are about to turn negative for the first time after registering four consecutive weeks of cash inflows.
Since the beginning of this week, the US spot Ether ETFs have registered a net cash outflow of about $346 million.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
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