Industry Titans Double Down on ETH: Can Ethereum Stage a Comeback?

Ethereum’s downturn has understandably rattled many investors.

A recent Matrixport report highlighted that global search interest in Ethereum has plummeted to near-historic lows, a trend often preceding further significant price declines. Compounding this, reduced on-chain activity, a falling Total Value Locked (TVL), and market speculation surrounding a potential US strategic digital asset reserve have collectively dampened demand for Ethereum’s native token, ETH. Current market conditions paint a clear picture: ETH demand is undeniably soft.

Despite this prevailing bearish sentiment, staunch proponents of the Ethereum ecosystem remain.

Notably, Nick Tomaino, founder of prominent investment firm 1confirmation, recently declared on social media that they are “doubling down on ETH.” His rationale: Ethereum is one of only two ecosystems in the crypto space — alongside Bitcoin — that are “credibly neutral and sufficiently decentralized,” granting it unique long-term “social scalability.”

Faced with persistent negative market sentiment, yet bolstered by industry leaders’ defiant endorsements, where is Ethereum headed next?

Historical Cycle Comparison: Echoes of Bear Markets?

Some market observers draw parallels between Ethereum’s recent performance and the bear market trajectories of 2018 and 2022. Pseudonymous trader “5.0 Inverted” suggests Ethereum is “following 2018 and 2022 bear market price action.” Data charts illustrate Ethereum’s significant declines of 82.71% and 68.29% in 2018 and 2022, respectively, with continued downward pressure throughout the latter half of those years.

Another analyst points to the previous cycle, where Ethereum corrected by 60% from $4,200 to $1,800 before staging a powerful 170% rally in the ensuing months, ultimately reaching an all-time high of $4,800. Drawing from the 2021 playbook, Ethereum may be poised for a period of continued weakness before a potential recovery towards the year’s end.

Technical Analysis: Mixed Signals Emerge

As of writing, Ethereum has rebounded from lows below $2,000 to around $2,240, finding robust support near the $2,000 mark. This level aligns with the key ICT Optimal Trade Entry (OTE) levels closely watched by traders, providing a temporary halt to the downward momentum.

Examining the hourly chart, ETH’s price action presents mixed signals. Following a brief breach of the local resistance at $2,262, the price has begun to retrace, suggesting that sellers may exert further downward pressure in the short term.

The daily chart, however, offers a more encouraging perspective. Ethereum’s price is trending upwards after bouncing off the $2,076 support level. From a medium-term view, definitive reversal signals are yet to materialize. Traders should closely monitor the crucial $2,000 zone. A break below this level could swiftly lead to a test of the $1,750 area.

Market analysts anticipate Ethereum to consolidate within a wide range between $2,000 and $2,500. This range-bound activity may persist until a breakout signal emerges, indicating the next major directional move. Both bulls and bears are intently observing these pivotal levels.

Should Ethereum maintain its position above $2,000 and build sustained momentum, the current phase could evolve into a renewed bullish wave. Chart analyst Ali Martinez identifies the $2,400 mark as Ethereum’s most critical resistance barrier, where over 2.41 million investors acquired 62.68 million ETH. A breakout above this level, according to Martinez, could “clear the path for a rally towards $3,000.”

CryptoQuant analyst MACD highlights that Ethereum’s MVRV ratio has dipped below 1, positioning Ethereum in an undervalued territory. Historically, previous bull cycles have seen significant price surges from this level. Furthermore, MACD notes a sharp increase in Ethereum accumulation addresses (addresses continuously receiving ETH without outflows), suggesting institutional investors are building positions during the current market dip.

However, MACD acknowledges that broader economic conditions, such as US liquidity policies and monetary strategies, could continue to exert downward pressure on asset prices. Therefore, while Ethereum exhibits bullish indicators, its near-term trajectory remains susceptible to external factors, and market sentiment has not fully transitioned to optimism, urging investors to remain cautious and await further definitive confirmation signals.

By BitpushNews Mary Liu

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