The world’s second largest cryptocurrency, Ethereum (ETH), has posted a 10 per cent lift within less than a week as it gears up to begin 2025 on the back of investor hope that has been curtailed after a wretched 2024.
Although Ethereum did not perform so well compared to Bitcoin and many altcoins last year, Ethereum’s renewed gains have sparked talk of a rally. But conditions in the market continue to be quite complex.
Ethereum Faces 200 MA Resistance
Ethereum markets continue to undergo aggressive shorting, according to CryptoQuant data shared by analyst Maartunn. When it comes to $350 million of over selling pressure, taker sellers are far ahead of buyers daily. This dynamic, which came into play in 2024, continues to hold ETH back, even as the altcoin leader tries to get it’s legs back.
After breaking above its 4 hour 200 EMA related to technical signals of long term bullishingesse Ethereum is now trading at $3,650. The 200 MA on that same timeframe is now a key resistance point. If Ethereum can make a decisive daily close above this mark, it could set it up to challenge and surpass last year’s highs reversing bearish trends.
The sustained shorting may not last forever, analysts say. Aggressive shorting has always been typical history before a market reversal as selling momentum slows, and buyers take advantage of cheaper prices. Reportedly, long-term investors are lining up for such an opportunity, betting on a wider rally in the coming weeks.
Still, risks remain. If haven’t held the 200 MA as support, there could be a renewed selling pressure taking ETH below recent gains and back to lower levels. Ethereum could start a sustained recovery starting later this year or it could break that cusp in the coming weeks.
ETH’s performance is being closely watched by market participants, who are hoping for a clean breakout above 2024’s highs, which would reawaken market sentiment and spur further buying. At the time of writing, ETH is at a critical juncture where it could break out to the upside, or continue to be pressured by bloody shorting.
