The current market performance of Ethereum is uninspiring, and this lackluster show is even reflected in the on-chain activity that has been lately. This sharp decline in Ethereum on-chain activity mirrors the growing uncertainty that is in today’s investment climate. Over the past week, however, this situation has taken a sharp turn for the worse. Ethereum transaction fees have dropped by more than 60%—almost 66% this time around. This has been another signal of a slowdown in network usage and has caused some to speculate about the bearish direction that ETH is headed in. The amount of ETH fees decreased by over 60% this week, as market uncertainty drove on-chain activity lower pic.twitter.com/fDFJgaFA1u — IntoTheBlock (@intotheblock) January 31, 2025 Cryptocurrency hasn’t kept up with Bitcoin and other assets, and now some big numbers are hinting that Ethereum might be in for a further downturn. But on the flipside, in what could be viewed as a potential counter-indicator to those big numbers, whales and big dogs in the investment world have been scooping up ETH at a pace that seems to be accelerating. Ethereum’s Struggle: Bearish Signals and Key Support Levels Ethereum’s recent pricing has been weak, with the MVRV (Market Value to Realized Value) Momentum indicator crossing over into bearish territory. This is commonly interpreted as a warning sign of potential further declines, as it indicates that holders of ETH—that they purchased at prices lower than the current price—are starting to cash in on those holdings and realize profits. And when you have a large number of entities that are trading an asset doing exactly that, it typically translates into some downward pricing pressure on the asset. #Ethereum continues to underperform, and now things are looking even worse. The MVRV Momentum just had a bearish crossover, signaling the potential for further downside. https://t.co/8ydVM5j03F — Ali (@ali_charts) January 31, 2025 Compounding the worries are the prices of Ethereum, which are now slothfully brushing against significant support zones that will determine their next move. On-chain data suggest a key support range from $2,230 to $2,610 that might serve as a cushion. If that cushion fails, experts are not ruling out a slumping ETH price that could take the currency back to the $1,800 level it saw in June. The area that holds the most important technical support sits between $2,800 and $3,000. Notably, Ethereum seems to be forming an inverse head-and-shoulders pattern—a bullish structure that might indicate a reversal is in sight, provided prices hold above crucial support. If ETH manages to stay in this range, it could careen toward a break of the pattern’s neckline at $4,000. Nevertheless, surpassing $4,000 will not be an easy thing to achieve. For almost four years now, this price level has been a tough nut to crack. Ethereum has made (and failed) several runs at breaking higher, and this price level has just about constantly served as a rejection point. It is no doubt a major psychological point and not a point that traders watching the asset would wish to do without; righthere is where ETH could potentially become something more. Whale Accumulation and Institutional Interest Could Drive a Recovery Even though the short-term view of Ethereum is not so bright, a big occurrence could change the outcome. The appearance of large-scale investors—or whales, as they’re known—has been noticed lately. These guys have been gathering up ETH in a big way, which speaks to an increasing confidence in what seems to be Ethereum’s long-term direction. One of the key players in this accumulation trend is World Liberty Financial, which has substantially augmented its Ethereum stake. The investment firm recently plowed another $10 million in USDT into the purchase of 2,972 ETH, increasing its total holding to a notable near-70,157 ETH, an investment now approximated at $235 million. World Liberty Financial Increases $ETH Holdings to 70K+ $ETH (~$235M). World Liberty Financial ( @worldlibertyfi ) just spent another 10M $USDT to buy 2,972 $ETH , raising their total holdings to 70,157 $ETH (~$235M)—one of their biggest bets in crypto. $ETH has gained ~3% in… https://t.co/m149IaqH0i pic.twitter.com/LIhk4mIFah — Spot On Chain (@spotonchain) January 31, 2025 Such substantial institutional buying hints at an enormous latent demand for Ethereum. It’s almost as if the market is being softened up for a “surprise” Ethereum price increase that could happen any day now. When “whales” pool their resources and slosh around a large-volume asset like Ethereum, it’s hard to see how such an event doesn’t end in a price increase. The bullish case for Ethereum continues to strengthen with the development of Ethereum spot exchange-traded funds (ETFs). These new products allow investors to get a taste of Ethereum without having to purchase the digital asset directly. And unlike Bitcoin ETFs, which have been around for a while, Ethereum spot ETFs are a new phenomenon. On January 30, the total net inflow for Ethereum spot ETFs stood at $67.77 million. Although this is a smaller number than what we’ve been seeing for Bitcoin, it still speaks to institutional investor interest in Ethereum as a path for digital asset exposure. The Path Forward: Key Resistance and Upside Targets Should Ethereum succeed in breaking the $4,000 resistance level, the historical MVRV Pricing Bands indicate that the next significant upside targets are $5,080 and $6,770. If these price levels become reachable, it will likely be due to mounting purchase pressure from both retail and institutional investors. Nevertheless, for the ETH value to touch these levels, it must first hold up above some critical support levels. The $2,900 zone looks to be very crucial, as losing this level could send the altcoin into a bearish spiral, triggering a significant amount of cascading, or stop-loss, selling that could push ETH down into the mid-$2,700s—even (gasp!) lower—while delaying Ethereum’s chance of breaking out. On January 30, Bitcoin spot ETFs had a total net inflow of $588 million. BlackRock ETF IBIT had a net inflow of $321 million, and Fidelity ETF FBTC had a net inflow of $209 million. Ethereum spot ETFs had a total net inflow of $67.7726 million. https://t.co/59u0BnEqLG — Wu Blockchain (@WuBlockchain) January 31, 2025 For the immediate future, it is advisable for investors to keep a close eye on the three following aspects: whale activity, ETF inflows, and general market sentiment. At first glance, it seems bearish. However, when one considers how many BTC are now being held by a small handful of entities, we see a strong potential for a price swing to the upside. Ethereum is at a critical juncture, and the market is divided on its next move. Will the accumulation of ETH during this time fuel a recovery, or will bearish pressure push it to lower levels before any true breakout occurs? Nothing is certain in the world of crypto. But if there is a sense that anything is true, it’s that the next few weeks will be a big deal for determining where Ethereum’s price goes for the rest of 2023. Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services. Follow us on Twitter @nulltxnews to stay updated with the latest Crypto, NFT, AI, Cybersecurity, Distributed Computing, and Metaverse news ! Image Source: nexusplexus/ 123RF // Image Effects by Colorcinch
