Ethereum's recent performance has left many investors concerned. Search interest globally has neared historical lows, often a precursor to further price declines. On-chain activity and Total Value Locked (TVL) have decreased, while speculation about potential U.S. digital asset reserves has weakened demand for ETH.
Despite this, prominent industry figures remain optimistic. ABCDE founder Du Jun recently stated he maintains strong conviction in Ethereum’s value, even after significant paper losses. Similarly, Nick Tomaino of 1confirmation announced a “double down on ETH” strategy, citing Ethereum’s credible neutrality and decentralization as key long-term advantages.
This divergence between market sentiment and influential backing raises a critical question: Can Ethereum stage a recovery?
Analyzing Historical Market Cycles
Market observers note similarities between Ethereum’s current price action and previous bear markets in 2018 and 2022. One anonymous trader suggested Ethereum is “following the bear market price trajectories” of those years, which saw declines of over 80% and 68%, respectively.
However, history also offers a bullish precedent. In 2021, ETH fell 60% from $4,200 to $1,800, only to rally 170% in subsequent months and eventually reach a new all-time high near $4,800. This pattern suggests that periods of extended weakness can sometimes precede powerful rebounds.
Technical Outlook: Key Levels to Watch
After recently testing lows below $2,000, Ethereum found support and rebounded to around $2,240. The $2,000 level represents a crucial psychological and technical barrier, aligning with key trader entry zones and temporarily halting further decline.
Short-term hourly charts show mixed signals. ETH briefly broke above local resistance at $2,262 but has since pulled back, indicating potential for further near-term downside.
The daily chart presents a more constructive view. The bounce from the $2,076 support level suggests underlying buyer interest, though a clear medium-term reversal pattern has yet to emerge. Traders are closely monitoring the $2,000 zone; a sustained break below could open the path toward $1,750.
Most analysts expect continued consolidation between $2,000 and $2,500. A decisive break out of this range is likely needed to signal the next major directional move.
Bullish Breakout Scenario
If Ethereum maintains support above $2,000 and builds momentum, the current phase could transition into a new bullish wave. Analyst Ali Martinez identifies $2,400 as a critical resistance level, where over 2.41 million addresses acquired 6.268 million ETH. A clean break above this zone could “pave the way for a rally toward $3,000.”
On-Chain and Fundamental Signals
Data from CryptoQuant indicates the Market Value to Realized Value (MVRV) ratio has dropped below 1, historically a zone where ETH has been undervalued and preceded significant rallies in past bull cycles.
Furthermore, the number of accumulation addresses—those that consistently receive ETH but never withdraw—has risen sharply. This often indicates that larger, institutional-scale investors are building positions during market weakness.
It’s important to note that broader macroeconomic factors, including U.S. monetary policy and liquidity conditions, continue to exert downward pressure on risk assets like cryptocurrencies. Market sentiment remains cautious, and investors should wait for additional confirmation before assuming a full recovery is underway.
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Frequently Asked Questions
What is causing Ethereum’s current price weakness?
Ethereum is facing reduced on-chain activity, decreased DeFi TVL, and broader macroeconomic headwinds that are reducing demand for risk assets. Search interest has also declined significantly.
How does the current ETH price compare to historical bear markets?
The current decline is being compared to the 2018 and 2022 bear markets, where ETH fell over 80% and 68%, respectively. Some analysts see similarities in the price structure and sentiment.
What is the MVRV ratio, and why is it important?
The MVRV ratio compares Ethereum’s market cap to the realized cap (the value of all ETH at the price they were last moved). A ratio below 1 often signals that the asset is undervalued and has been a good buying opportunity in previous cycles.
What price level is critical for Ethereum to hold?
The $2,000 level is widely watched as major support. A sustained break below could lead to a test of $1,750, while holding above it could allow for a base formation and eventual push higher.
Are large investors buying Ethereum now?
On-chain data shows a rise in “accumulation addresses,” which are wallets that only receive ETH and never send it. This is often interpreted as smart money or institutional investors building long-term positions quietly.
What could trigger a new Ethereum bull run?
A break above key resistance near $2,400, a shift to more favorable U.S. monetary policy, or a resurgence in on-chain activity and DeFi usage could all be potential catalysts for a new upward trend.