TLDR
- According to insights from Santiment, the sentiment surrounding ETH has slumped to its lowest in a year, which might actually signal a chance for a market upturn.
- In the past month, Ethereum's value has plummeted over 20%, lagging behind Bitcoin, which only saw a 10% drop during the same period.
- Industry analysts propose that an overwhelmingly bearish sentiment often aligns with a market hitting rock bottom and is frequently followed by notable recovery.
- World Liberty Financial, with backing from the Trump family, has expanded its Ethereum investments by $10 million within just a week.
- Ethereum is encountering resistance at $2,220, with significant support appearing at the $2,100 and $2,050 thresholds.
Despite being the second-largest cryptocurrency, Ethereum has been in a rut, feeling a squeeze on its price and social engagement. Blockchain analysis from Santiment indicates trader sentiment on Ether striking its lowest this year amid ETH's over 20% drop in recent weeks.
Ethereum's downturn is more pronounced than Bitcoin's, with ETH landing around $2,176, contrasting Bitcoin's meager 10% fall, souring social media sentiment.
Santiment keeps tabs on the buzz around Ethereum across platforms like X, Reddit, and Telegram, noticing a shift from the optimism of last year's bull market to the somber outlook following September.
Experts in the field believe this widespread pessimism could actually herald a positive shift. As Santiment highlighted on X on March 5, 'the widespread bearishness over social media might be a harbinger of a turnaround once crypto markets settle.'
š» Sentiment for Ethereum has slid to its lowest all year as it struggles compared to other leading cap assets. But for those patient investors, this bearishness across social platforms could hint at a reversing trend as markets stabilize. $ETH Mike Cahill from Douro Labs underscores the need to distinguish transient market narratives from the bedrock fundamentals. Historical data shows that deep dives in sentiment often map out market bottoms, leading movements rather than trailing them. pic.twitter.com/iRaKTvb0Tu
ā Santiment (@santimentfeed) March 6, 2025
Cahill remains confident about Ethereum's future. He envisions that with market stabilization, Ether stands to gain the most from returning liquidity and sustained institutional buy-in.
Dominick John from Kronos Research also shares this sentiment. Although the recent downtrend might rattle short-term traders, he argues that a highly negative sentiment often indicates a market nearing its lowest point.
Growing Institutional Support
Multiple factors might spark a bounce back for ETH prices, such as falling interest rates or clearer rules for staking ETH through ETFs. John's optimism is also buoyed by persistent institutional acquisition.
World Liberty Financial (WLFI), linked to the Trump family, serves as a case in point for institutional interest, reportedly boosting its Ethereum portfolio by $10 million over a week's time.
Technical analysts see hopeful signs for ETH holders, noting the low MVRV Z-Score, which assesses whether the asset is over or undervalued, touching its lowest in 17 months, reminiscent of October 2023, preluding a nearly 160% surge.
Historical dips in this metric, like in December 2022 and March 2020, have likewise been precursors to bullish trends, suggesting today's low may usher a similar recovery.
Some analysts are pinpointing structural issues impacting Ethereum's performance. Jack Tan from Woo X attributes Ethereumās dilemmas to slipping network activity and diminishing total value locked (TVL).
Tan notes that reduced layer-1 transactions compared to peak times have caused a decline in the burn rate, weakening its deflationary strength. Additionally, competition from robust layer-1s like Solana has splintered the ecosystem.
The migration of activities to layer-2 solutions has also diminished demand for ETH as a foundational layer. According to Tan, it reaped considerably during the DeFi surge, but that edge has since waned.
Focusing on immediate price movements, Ethereum's recent attempt to ascend past the $2,320 mark was unsuccessful. Prices have since fallen back below $2,220 and the 100-hourly Simple Moving Average. Ethereum A critical rising channel support was broken at $2,220, hitting a low of $2,103, suggesting a tentative recovery with small breakouts past $2,120 and $2,150, although $2,220 remains a formidable barrier.
If Ethereum can overcome the $2,220 and $2,320 hurdles, a significant upward movement is possible, targeting next at $2,420, and potentially pushing towards $2,500 or even $2,550 soon.
Technical analysis shows that ETH However, failing to breach the $2,220 resistance could trigger further declines with initial support at $2,100, and crucial support at $2,050. Falling under these might drop it toward $2,000 or even $1,880 shortly.
Currently, Ethereum owners are observing these pivotal levels while experts deliberate whether this extreme bearish phase marks the bottom or if more downward movement awaits.
Maisie boasts rich experience as a Crypto and Financial news journalist, having contributed to Moneycheck.com, level-up-casino-app.com, Computing.net and holds the Editor in Chief role at Blockfresh.com
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