In the volatile world of cryptocurrencies, Ethereum (ETH) has recently faced a significant downturn, with its price dipping below the $3,500 mark in the past few weeks.
Despite lagging behind in the recent bullish market trend, investor sentiment towards ETH has cooled off.
Nevertheless, fresh insights from Cryptoquant signal a possible turnaround on the horizon, with key on-chain metrics hinting at a potential resurgence in market optimism for Ethereum.
The fact that Ethereum has managed to stay above the crucial $3,000 support level has given bullish traders an opportunity to regroup.
This shift is evident in the rising Funding Rates, indicating an increase in long positions as traders brace themselves for a possible change in market direction.
The uptick in Funding Rates points to a surge in demand, often seen as a sign of growing confidence in the asset’s recovery prospects.
If this positive momentum continues, Ethereum could aim for the $4,000 resistance mark, buoyed by mounting buying pressure and a more favorable sentiment in derivative markets.
Forecast and Analysis of Ethereum Price Movement Leading up to 2025
With Ethereum currently priced at $3,385 as we enter 2025, market indicators paint a cautiously optimistic picture for the future.
The Relative Strength Index (RSI) suggests a slightly bearish outlook, but the Moving Average Convergence Divergence (MACD) histogram indicates a waning bearish influence, hinting at potential upward movement.
Recent on-chain data shows a surge in ETH withdrawals from exchanges, a bullish sign often associated with long-term accumulation by investors.
Moreover, there has been a notable increase in active Ethereum addresses post-December, coinciding with the rising adoption of Layer-2 solutions like Optimism (OP) and Arbitrum (ARB).
If the buying momentum remains strong, ETH could set its sights on breaching the $4,000 resistance level in the first quarter of 2025, driven by a possible resurgence in institutional interest spurred by the return of Donald Trump to office.
However, external macroeconomic factors and the trajectory of Bitcoin will continue to play a significant role in shaping Ethereum’s performance in the medium term.