Key Points
- Ethereum (ETH) is poised for a significant bullish break beyond $4K, despite short-term sellers’ dominance.
- Ether’s price may drop towards $2,230-$2,610 support range due to ongoing Quantitative Tightening (QE).
As we approach the end of January 2025, it’s clear that short-term sellers currently have the upper hand in the Ethereum market.
The altcoin, which boasts a fully diluted valuation of around $384 billion and a 24-hour average trading volume of $24 billion, has been stuck in a falling wedge pattern since mid-December 2024.
Bitcoin’s Dominance and Ethereum’s Potential Breakout
With Bitcoin’s dominance nearing 60% for the first time in 2025, the ETH/BTC pair has continued to decline over the long term.
After retesting a key support level above $3,040 in recent days, which aligns with the 50-weekly Moving Average (MA), Ethereum’s price is now hinting at a possible bullish breakout towards a new all-time high.
Crypto analyst Ali Martinez notes that Ether’s MVRV recently fell below the 160-day MA, suggesting a potential 40% drop below the $3K support level.
Crypto analyst Benjamin Cowen also points out that Ethereum’s price is likely to continue dropping due to ongoing Quantitative Tightening (QE).
Ethereum’s Future Outlook
As a result, Ethereum’s price could fall towards the support range between $2,230 and $2,610, where around 12 million traders bought over 62 million ETH.
However, this bearish short-term outlook for Ethereum will be invalidated if the altcoin consistently closes above the key resistance level of around $4K.
The Ethereum network, the largest Web3 ecosystem with a total value locked of about $64 billion and a stablecoins market cap of around $117 billion, is feeling the pressure from the growing dominance of other layer one chains.
This has led Ethereum whales to increase the rate of profit distribution to other blockchains.
On-chain data analysis from Glassnode reveals that long-term Ethereum investors have started to feel anxious after being extremely bullish in the last three months.
Moreover, US spot Ether ETFs are on the verge of turning negative for the first time after four consecutive weeks of cash inflows, with a net cash outflow of about $346 million recorded since the beginning of the week.
