In 2024, Ethereum, the second-largest cryptocurrency by market capitalization, performed relatively mediocre compared to Bitcoin and other altcoins. As 2025 begins, Ethereum is showing signs of a possible recovery, with a quick 10% gain in one week. This positive start has sparked optimism among investors and analysts, hinting at a promising year ahead.
Renowned analyst Maartunn recently provided data showing a predominant trend of aggressive short selling in the Ethereum markets. According to Maartunn, buyer sellers have been dominating the market, outperforming buyer buyers by more than $350 million daily. This aggressive short selling could have contributed to Ethereum’s disappointing performance in 2024, as constant selling pressure likely hampered any bullish momentum.
With renewed hope for the new year, many anticipate a reversal in this short-selling trend, creating a favorable environment for Ethereum to potentially regain its leading position in the market. As Ethereum faces and overcomes challenges, the coming weeks will be crucial in determining whether this early surge marks the beginning of a sustained upward trajectory. Investors are watching Ethereum closely, hoping that a reversal of prevailing bearish trends could pave the way for a remarkable 2025 for the network.
Ethereum Emerges Amid Growing Short Activity
Ethereum is striving to surpass its 2024 peak, but a definitive breakthrough remains uncertain. Recent price movements suggest the possibility of a rally, with Ethereum showing early gains in 2025. However, the road ahead is complex, as significant selling pressures persistently weigh on the leading altcoin.
Leading analyst Maartunn recently shared insightful data from CryptoQuant, highlighting the current market dynamics. The data indicates a prevalence of aggressive short selling on Ethereum, with receiving sellers dictating trading activities. Daily records show over $350 million more selling pressure than buying activity, creating a challenging environment for Ethereum to break free from its existing range.
Although this trend may temporarily contain prices, it is unlikely to last indefinitely. Market cycles often see these types of aggressive short positions as a precursor to a reversal, as selling momentum wanes and buying pressure increases. Long-term investors are reportedly viewing this phase as an opportunity, positioning themselves to capitalize on Ethereum’s comparatively lower prices.
As Ethereum navigates these market dynamics, the next few weeks are critical. A decisive break above last year’s high could signal the beginning of a broader rally, reigniting interest and potentially reversing the current near-term trend. Currently, Ethereum is at a crucial moment.
Testing critical price levels
At $3,650, Ethereum is trading strongly in 2025, gaining considerable momentum earlier in the year. The recent price action saw it surpass the 200 4-hour EMA with notable strength, a crucial technical indicator for long-term trends. ETH is currently testing the 200 MA over the same time frame, a level that could validate the uptrend if it recovers and holds as support.
A strong daily close above the 200 MA would confirm Ethereum’s upward trajectory, which could open the doors to a substantial rally that challenges and surpasses last year’s peaks. Such a move could reinvigorate market sentiment and attract additional buying interest, propelling Ethereum to new heights in the near term.
However, the bullish outlook carries its share of risks. Failure to hold the 200 MA as support could trigger a new wave of selling pressure in the market. This could push ETH towards lower levels, eroding recent gains and prolonging the struggle to regain bullish momentum.
Image credit: Dall-E, chart courtesy of TradingView
