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ethereum, the second-largest cryptocurrency by market cap, had a lackluster 2024, underperforming bitcoin and many altcoins throughout the year. However, as the year 2025 begins, ethereum is starting to show signs of recovery, gaining over 10% in less than a week. This initial rise has rekindled hope among investors and analysts who see potential for a strong performance this year.
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Prominent analyst Maartunn recently shared insightful data highlighting a continued trend of aggressive short selling in ethereum markets. According to Maartunn, sellers have been dominating the market, outselling buyers by more than $350 million a day. This aggressive short selling could explain ethereum's poor performance in 2024, as constant selling pressure likely suppressed bullish momentum.
With the optimism of the new year, many believe that this short-selling trend may begin to change, creating the conditions for ethereum to regain its position as the market leader. As the altcoin leader overcomes its challenges, the coming weeks will be critical in determining whether this initial rally marks the beginning of a more sustained uptrend. Investors are closely monitoring ethereum, anticipating that a reversal of these bearish trends could lead to a stellar 2025 for the network.
ethereum Surges Amid Aggressive Short Selling Trends
ethereum is attempting to surpass its 2024 high, but a decisive breakout remains elusive. The recent price action indicates the potential for a rally, with eth posting early gains in 2025. However, the path forward is unclear as significant selling pressure continues to weigh on the altcoin leader.
Senior Analyst <a target="_blank" href="https://x.com/JA_Maartun/status/1875521619206238438″ target=”_blank” rel=”nofollow”>Maartunn recently shared revealing CryptoQuant datashedding light on current market dynamics. According to the data, ethereum is experiencing aggressive short selling, with buyer-sellers dominating the trading activity. Over $350 million more in selling pressure than buying activity is recorded daily, creating a challenging environment for eth to break free from its current range.
This trend, although it reduces prices in the short term, cannot last indefinitely. Market cycles often see such aggressive short selling as a precursor to a reversal, as sellers run out of momentum and buying pressure begins to build. Long-term investors are reportedly viewing this phase as an opportunity, positioning themselves to capitalize on ethereum's relatively low prices.
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As ethereum navigates this dynamic, the next few weeks will be crucial. A clear break above last year's high could signal the start of a broader rally, attracting renewed interest and potentially reversing the current near-term trend. For now, eth remains at a crucial moment.
Crucial Price Testing Levels
ethereum is trading at $3,650 after a strong start through 2025, gaining significant traction in the early days of the year. Recently, the price surpassed the 200 4-hour EMA with impressive strength, a technical indicator often seen as a critical threshold for long-term trends. eth is now testing the 200 MA over the same time frame, a level that could confirm the uptrend if it recovers and holds as support.
A strong daily close above the 200 MA would solidify ethereum's upward momentum, which could pave the way for a massive rally that challenges and surpasses last year's highs. Such a move would likely revitalize market sentiment and attract additional buying pressure, driving ethereum to new levels in the near term.
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However, the bullish outlook is not without risks. If ethereum fails to hold the 200 MA as support, the market could see a renewed wave of selling pressure. This would likely push eth towards lower levels, eroding recent gains and prolonging its battle to regain bullish momentum.
Featured image of Dall-E, TradingView chart
