The first quarter of 2025 could be a positive one for Ethereum, according to several leading analysts. The cryptocurrency has struggled to maintain a position over the $4000 dollar mark, despite huge surges from Bitcoin. However, a rally could be imminent due to deleveraging in the crypto market.
A recent crypto rally, sparked by confidence in the US for crypto, has been apparent over the last month or so. Bitcoin, Solana, and XRP have all hit new record highs. Yet Ethereum has been fairly static. Despite lots of positivity in the market, it has only managed to provide around a 12% return. Hitting a resistance level of $4100, it could soon push through. Many are predicting that once broken, this will signal a point of future growth. This could even help it increase to $8,800 if it manages to surpass an all-time high of $4,865. Ethereum currently has a market value of around $476 billion with a trading volume that equates to $30 billion in any 24-hour period.
The Current State of Ether
There are several factors that put Ethereum at an advantage over many other cryptocurrencies. The first is that other than Bitcoin, it is the only currency to have an ETF.
These exchange-traded funds were introduced last year. They are a way for more traditional investors to trade in cryptocurrency assets. BlackRock and Fidelity are two major providers for this, and since the second week in December, they have begun to amass $500 million in Ether. In a three-week period alone, around $2.1 billion in inflows was recorded moving into these wallets. BlackRock’s ETHA had its highest weekly cash inflow of around $854.85 million.
Another indicator is the Bitcoin halving cycle. This occurs every four years and cuts the reward for any Bitcoin mined. It is a way to safeguard it against inflation. Generally, after an event, the markets follow fairly predictable patterns. Around six months after this event, Bitcoin takes a huge surge in price. This was seen this year after a halving event in April, albeit with a surge that was slightly delayed due to world events.
When this happens, the same patterns occur for Ethereum. Generally, Ether stays low-key for around 8 months after a Bitcoin halving event. The Ethereum price then jumps in value. This has not gone unnoticed, and around 130,000 new Ethereum wallets were created in December, showing many more people are gearing up to invest in Ethereum.
This mirrors the sentiment of several whale investors. The supply of Ether overall on central exchanges has hovered at around 15.5 million. This was after a drop period of 177k due to an increased demand for whale investors, who hold large sums of capital. While this happened, addresses that had over 10k in Ether increased over the last few months.
Can Ether Increase Its Position?
Others have noticed that Ethereum is going through a macro bull rally. This tests it against a logarithmic trend, though to continue it must break this $3950 barrier. The weekly Relative Strength Index must also rise above a 70% index. Relative strength indicators are used to show the speed and magnitude of price changes. Many people use them to see overbought or sold valuations in investments.
Its trend will also depend on whether it is able to maintain its position at the forefront of web3 innovations. Currently, it remains the market leader in this area. $78 billion exists in total value locked. There are also over $110 billion in stablecoins.
Many countries have already begun to look into the Ethereum network to solve real-world problems. For example, Nigeria is using it to address the backlog in their real estate and land registry, which has over 1 million cases in arrears. It is believed smart contracts can alleviate this while also cutting down on land fraud that is taking place. Should a major global power like the United States begin to adopt Web3 for similar functions, it would receive a huge boost.
Of course, there are voices on the other side of the fence. All investments carry risk, with cryptocurrency being notoriously volatile. The weekend prior to writing this article saw $252 million reported in liquidations alone. This was met with rebounds but shows how fickle the crypto market can be. It also shows another stall at $3900 as Ether tries to reach that mythical $4000 figure.
The signs for Ethereum reaching its high look positive. It has historical trends backing it. This time, it has been backed by increased confidence in ETFs and their use in real-world applications. Should this continue, then it will undoubtedly enter a bull run in 2025 that could see it reach higher than imagined. However, those looking to make money must keep watch on market trends, such as declining use and the adoption of other blockchains in preference to Ethereum.
