Ethereum, the second-largest cryptocurrency by market capitalization, lacked 2024, underperforming against Bitcoin and many altcoins throughout the year. However, as 2025 begins, Ethereum is starting to show signs of recovery, rising more than 10% in less than a week. This early growth has rekindled hope among investors and analysts who see the potential for a strong performance this year.
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Top analyst Martoon recently shared insightful data highlighting the ongoing trend of aggressive shorting in Ethereum markets. According to Martun, takeaway sellers are dominating the market, outselling takeover buyers by more than $350 million daily. This aggressive shorting could explain Ethereum’s poor performance in 2024, as continued selling pressure likely suppresses the upside.
With the optimism of the new year, many believe that this trend of getting smaller may begin to reverse, which could lead to Ethereum to reclaim its position as a market leader. As the altcoin leader mounts its challengers, the coming weeks will be crucial in determining whether this initial rally represents the start of a more sustained upward trend. Investors are watching Ethereum closely, speculating that a reversal of these bearish trends could lead to a promising 2025 for the network.
Ethereum is rising amid aggressive shorting trends
Ethereum is trying to push above its 2024 high, but a decisive breakout remains elusive. Recent price action shows the potential for a rally in 2025, with ETH making early gains. However, the path forward is not clear, as significant selling pressure continues to weigh on the altcoin leader.
Top analysts Maartunn recently shared informative data from CryptoQuantThrowing light on current market dynamics. According to the data, Ethereum is experiencing aggressive shorting, with buyers and sellers dominating trading activity. More than $350 million in sell-side pressure compared to buy-side activity is recorded daily, creating a challenging environment for ETH to break free from its current cap.
This trend, while depressing prices in the short term, may not last indefinitely. Market circles often see such aggressive shorting as a precursor to a reversal, as sellers get out of momentum and buying pressure begins to build. Long-term investors are reportedly seeing this phase as an opportunity, positioning themselves to capitalize on Ethereum’s relatively low prices.
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As Ethereum navigates these dynamics, the next few weeks will be crucial. A clean breakout above last year’s high could signal the start of a broader rally, attracting renewed interest and potentially reversing an ongoing shorting trend. For now, ETH remains at an important juncture.
Price testing important levels
Ethereum is trading at $3,650 after a strong start to 2025, gaining significant traction in the early days of the year. The price recently broke above the 4-hour 200 EMA with impressive strength, a technical indicator often seen as a critical threshold for long-term trends. ETH is now testing the 200 MA on the same timeframe, a level that could confirm a bullish trend if reclaimed and held as support.
A strong daily close above the 200 MA will reinforce Ethereum’s upward momentum, potentially paving the way for a massive rally to challenge and surpass last year’s highs. Such a move would likely revive market sentiment and attract additional buying pressure, driving Ethereum to new levels in the near term.
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However, the bullish outlook is not without its risks. If Ethereum fails to hold the 200 MA as support, the market may see a new wave of selling pressure. This will likely push ETH to lower levels, curtailing recent gains and prolonging its battle to regain upside.
Featured images from Dall-E, charts from TradingView
