Industry giants are increasing their positions, can ETH turn the tide in the future?
The current market environment shows that the weak demand for ETH has become an undeniable fact.Author: BitpushNews
The recent downturn of Ethereum has indeed left many investors feeling heartbroken. A latest report from Matrixport indicates that the global search interest in Ethereum has approached a historical low, which in the past often foreshadowed a significant price drop. The decrease in on-chain activity, the decline in Total Value Locked (TVL), coupled with market speculation about the potential strategic digital asset reserves in the U.S., have combined to significantly weaken the demand for Ethereum's native token, ETH. The current market environment shows that the weak demand for ETH has become an undeniable fact.
However, there are still many staunch supporters of the Ethereum ecosystem in the industry. Du Jun, founder of ABCDE, publicly stated on March 3 that despite accumulating Ethereum over the past year resulting in a paper loss of over $20 million, he still firmly believes in Ethereum's value and is even considering selling other assets to lower his ETH holding cost.
Nick Tomaino, founder of the well-known investment firm 1confirmation, even candidly expressed on social media that they will "double down on ETH," as he sees Ethereum as one of the only two "trustworthy, neutral, and sufficiently decentralized" ecosystems in the crypto world, possessing unique long-term "social scalability."
In the face of the persistently gloomy market sentiment and the "counter-trend support" from industry giants, what does the future hold for Ethereum?
Historical Cycle Comparison: A Script Replayed?
Some market observers point out that Ethereum's recent performance is similar to the bear market trends of 2018 and 2022. An anonymous trader, 5.0 Inverted, stated that Ethereum is "following the price trends of the bear markets in 2018 and 2022." The data in the chart below shows that Ethereum fell by 82.71% in 2018 and 68.29% in 2022, continuing to decline in the second half of those years.
Another trader noted that Ethereum previously dropped 60% from $4,200 to $1,800 in the last cycle, followed by a strong rebound of 170% in the following months, eventually reaching an all-time high of $4,800. Drawing from the experience of 2021, Ethereum may continue to maintain its current weak state before rebounding at the end of the year.
Technical Analysis: Mixed Signals
As of the time of writing, Ethereum has rebounded from a low of below $2,000 to around $2,240, finding strong support near the $2,000 mark, which aligns with the key ICT Optimal Trade Entry (OTE) level closely monitored by traders, temporarily halting the downward momentum of the price.
From the hourly chart, ETH prices show mixed signals. After briefly breaking through the local resistance level of $2,262, the price began to retreat, and the bears may further push the price down in the short term.
The daily chart, however, conveys a more positive message. After rebounding from the support level of $2,076, Ethereum's price began to rise. In the medium term, there has not yet been a clear reversal signal. Traders should focus on the key area around $2,000. If this level is breached, the price may quickly test the $1,750 area.
Market analysts expect Ethereum to undergo wide-ranging consolidation between $2,000 and $2,500, a range that may persist until a breakout signal appears, indicating the next major trend. Both bulls and bears are closely watching these key levels.
If Ethereum can maintain above $2,000 and build momentum, the current phase may evolve into a new bullish wave. Chart analyst Ali Martinez believes that the most critical resistance level for Ethereum is at the $2,400 mark, where over 2.41 million investors have purchased 62.68 million ETH. For analysts, breaking this level could "pave the way for a rebound to $3,000."
CryptoQuant analyst MACD believes that Ethereum's MVRV ratio has fallen below 1, placing Ethereum in an undervalued zone. Historically, this level has seen significant price increases during previous bull market cycles. Additionally, MACD points out that the number of accumulating addresses (addresses that continuously receive ETH but have never withdrawn) has sharply increased, indicating that institutional investors are building their positions during the current market downturn.
However, MACD also acknowledges that broader economic conditions, such as U.S. liquidity and monetary policies, may continue to exert downward pressure on asset prices, and market sentiment has not fully turned optimistic. Investors should remain cautious and wait for more clear signals for validation.
