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ethereum started the new year with a strong performance, surging over 9% in just a few days. This rally has brought renewed optimism to the market, especially among analysts and investors who were increasingly concerned about ethereum's prolonged underperformance compared to bitcoin. In recent months, eth struggled to maintain momentum, causing many to question its near-term potential.
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However, top analyst Daan recently shared a revealing chart that has changed the narrative. According to Daan, ethereum has historically shown significant activity during the first quarter of the year, even in periods when it lagged behind bitcoin. This trend underscores ethereum's potential to rebound as market dynamics shift in its favor.
While ethereum price action is gaining strength, the next few weeks will be crucial. Investors are watching closely to see if eth can maintain this momentum and regain dominance within the altcoin space. Overall market sentiment suggests that 2025 could be a pivotal year for ethereum, and the first quarter trend could set the tone for an impressive future.
ethereum's start to the year sparks optimism
ethereum has started 2025 on an optimistic note, and investors and analysts are watching closely to see if this momentum can be sustained. While the start to the year has been strong, ethereum's performance will need to break past trends of underperformance relative to bitcoin to truly prosper in the coming months.
Top analyst Daan recently <a target="_blank" href="https://x.com/DaanCrypto/status/1874501339356504396″ target=”_blank” rel=”nofollow”>shared a detailed analysis of the eth/btc ratio on xhighlighting the historical importance of the first quarter for ethereum. According to Daan, ethereum has often seen substantial gains during this period, even in years when it lagged behind bitcoin.
During the previous bull cycle in 2020 and 2021, the eth/btc ratio saw significant increases that coincided with the start of an alt-season. This historical data suggests that ethereum's first-quarter performance could set the tone for broader market activity.
For ethereum to build on this promising start, the ~0.04 level in the eth/btc ratio is a critical resistance point. A decisive break above this level could revive investor confidence and potentially lead to significant gains. However, if it fails to maintain momentum or break through key levels, ethereum could continue the broader trend of relatively underperformance.
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The next few weeks will be crucial. If ethereum can build on this Q1 strength and surpass critical thresholds, 2025 could mark a breakout year for the leading altcoin.
eth testing critical zone
ethereum is trading at $3,595 after hitting a high of $3,629 yesterday, testing a critical level that could determine its near-term direction. The price has shown resistance, recovering from the late December decline, but the bulls now face the challenge of breaking this important resistance to maintain the bullish momentum.
This level represents a crucial juncture for ethereum. A break above $3,629, followed by a strong close, could signal the start of a bullish rally, potentially setting the stage for a move towards higher targets in the coming weeks. However, the market remains in a recovery phase, with trading activity reflecting cautious optimism as investors weigh the potential for a continued bullish move.
Despite these positive outlooks, the path forward may require patience. Consolidation around current levels is possible as the market seeks clarity and momentum builds. Bulls will need to maintain ethereum's position above $3,500 to ensure the bullish structure remains intact.
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As the market begins to wake up from the seasonal correction, ethereum's performance at these levels will be critical. A decisive move in either direction could set the tone for the altcoin's trajectory in the coming months, making this a key moment for investors and traders alike.
Featured image of Dall-E, TradingView chart
