Ethereum has been struggling, with its market cap plunging 36% in just seven weeks. It dropped from $360 billion on December 22, 2024, to $230 billion on February 8, 2025, wiping out a significant chunk of investor profits. Confidence in ETH has taken a hit, especially as it lags behind other major cryptocurrencies.
Market trends, technical indicators, and on-chain data reveal a complex picture – one that could hold clues about what’s next for ETH.
Why Are Investors Pulling Back?
Santiment’s analysis shows that negative sentiment has increased selling pressure, with many retail traders offloading their ETH due to fear, uncertainty, and doubt (FUD). As a result, daily trading volume has dropped 20%, with only 15.2 million ETH traded on February 8, compared to the monthly average of 19 million.
📉 Ethereum’s market cap has dropped -36% since its local high just 7 weeks ago. The result has been a stark drop in the amount of ETH tokens in profit since their date first mined. On the daily close, we are seeing the lowest percentage in profit in over 4 months, and lowest… pic.twitter.com/ze8uVeWqfA
— Santiment (@santimentfeed) February 8, 2025
Ethereum’s network activity has also declined, with active addresses and transaction volumes falling by 12% and 18%, respectively. This signals lower demand and participation in the network, adding to the bearish outlook.
Technical Indicators Point to More Volatility
Ethereum’s technical indicators also suggest further uncertainty. The Relative Strength Index (RSI) for ETH/USD is at 32, signaling an oversold market that could see a rebound. However, the Moving Average Convergence Divergence (MACD) shows a bearish crossover, confirming the ongoing downtrend.
Meanwhile, widening Bollinger Bands indicate higher volatility, meaning ETH’s price could continue to swing. The cryptocurrency recently dipped to $2,140 before rebounding to $2,620 but remains 37% below its December high.
Is a Reversal Coming?
Despite the bearish signs, some analysts believe Ethereum could be nearing a turnaround. Crypto analyst Maxpain points out that Ethereum’s Network Realized Profit/Loss (NPL) metric suggests capitulation—a phase that has historically been followed by strong recoveries.
Additionally, whale transactions over $100,000 have been rising since late January. This could indicate that large investors are quietly accumulating ETH, potentially positioning themselves for a future rally. If this trend continues, Ethereum may be gearing up for a comeback.
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FAQs
Is Ethereum a buy or sell now?
Ethereum is bearish, but signs of whale accumulation hint at a rebound. Consider market trends and risk before buying or selling.
Why is ETH crashing?
ETH is crashing due to negative investor sentiment, lower trading volumes, and bearish technical indicators, leading to increased selling pressure.
Can I buy $1 Ethereum?
Yes, you can buy a fraction of ETH for $1 on most exchanges, as Ethereum is divisible up to 18 decimal places.
What affects Ethereum’s price?
ETH price is influenced by demand, network activity, investor sentiment, technical indicators, and macroeconomic factors.