Ethereum Price Signals Potential Bullish Breakout Amid Short-Term Selloff
As of late January 2025, short-term sellers dominate the Ethereum market. Key points include:
- Ethereum's fully diluted valuation is around $384 billion with a 24-hour trading volume of approximately $24 billion.
- The asset has been in a falling wedge pattern since mid-December 2024.
- Bitcoin dominance is near 60%, causing the ETH/BTC pair to decline.
- Ether's price tested support above $3,040, coinciding with the 50-week MA, indicating potential for a bullish breakout toward new highs.
Price Predictions and Market Sentiment
- Analyst Ali Martinez noted Ether's MVRV dropped below the 160-day MA, suggesting a possible 40% drop below $3,000.
- Benjamin Cowen stated that ongoing Quantitative Tightening (QE) may lead to further price declines.
- Potential support levels are between $2,230 and $2,610, where over 62 million ETH was purchased by nearly 12 million traders.
- A consistent close above $4,000 could invalidate the bearish outlook.
- Ether is forming a reversal pattern with a triple top and bearish divergence on the weekly RSI.
Whale Activity and Market Dynamics
- Ethereum remains the largest Web3 ecosystem with a total value locked at about $64 billion and stablecoin market cap at around $117 billion.
- Growing competition from other layer one chains like Solana, Ripple, Toncoin, and Tron poses threats to Ethereum’s dominance.
- Whales are distributing profits to other blockchains amid rising market pressures.
- Long-term Ether investors show increased anxiety after being bullish for three months.
- US spot Ether ETFs have seen a net cash outflow of about $346 million this week, marking a shift after several weeks of inflows.