Ethereum Shows Early 2025 Gains Amid $350M Daily Shorting Pressure
Ethereum, the second-largest cryptocurrency by market capitalization, underperformed in 2024 compared to Bitcoin and many altcoins. However, as 2025 begins, Ethereum has gained over 10% in under a week, sparking renewed interest among investors and analysts who foresee potential for strong performance this year.
Analyst Maartunn highlighted ongoing aggressive shorting in Ethereum markets. Taker sellers have outpaced taker buyers by over $350 million daily. This selling pressure likely contributed to Ethereum's poor performance in 2024.
With optimism for the new year, many believe the shorting trend may shift, allowing Ethereum to reclaim its market leadership. The coming weeks will be essential to determine if the early rally indicates a sustained upward trend, with investors anticipating a reversal of bearish trends for a successful 2025.
Ethereum Rising Amid Aggressive Shorting Trends
Ethereum is attempting to surpass its 2024 high but faces significant selling pressure. Recent price action shows potential for a rally, with ETH posting early gains in 2025. However, aggressive shorting continues to challenge Ethereum’s breakout efforts.
According to data shared by Maartunn from CryptoQuant, Ethereum is experiencing substantial shorting, with over $350 million more in sell-side than buy-side activity daily. This trend creates a difficult environment for ETH to break free from its current range.
This aggressive shorting trend may not persist indefinitely. Market cycles often see such behavior preceding reversals, as sellers exhaust momentum and buying pressure increases. Long-term investors are reportedly positioning themselves to capitalize on Ethereum’s relatively low prices during this phase.
The next few weeks will be critical for Ethereum. A breakout above last year’s high could signal the beginning of a broader rally, potentially reversing the ongoing shorting trend. Currently, ETH is at a pivotal juncture.
Price Testing Crucial Levels
Ethereum is trading at $3,650 after a strong start to 2025, gaining traction early in the year. The price recently broke above the 4-hour 200 EMA, a key technical indicator for long-term trends. ETH is now testing the 200 MA on the same timeframe, which could confirm a bullish trend if reclaimed and held as support.
A strong daily close above the 200 MA would reinforce Ethereum’s upward momentum, possibly leading to a significant rally that challenges last year’s highs. Such movement would likely enhance market sentiment and attract additional buying pressure.
However, risks remain. If Ethereum cannot hold the 200 MA as support, it may face renewed selling pressure, pushing ETH back toward lower levels and prolonging its struggle to regain upward momentum.
Featured image from Dall-E, chart from TradingView