In recent months, Ether (ETH) has been facing significant downward pressure, struggling to reverse a near three-month downtrend largely influenced by macroeconomic concerns and continuous selling activities from U.S. Ether exchange-traded funds (ETFs). Despite its potential, Ether has experienced a staggering decline of more than 53% since reaching a peak above $4,100 on December 16, 2024, according to data from TradingView.
This downtrend is exacerbated by global economic uncertainty surrounding U.S. import tariffs, which have triggered trade war concerns, alongside a noted lack of builder activity on the Ethereum network, as detailed by analysts from Bifinex.
ETH/USD, 1-day chart, downtrend. Source: Cointelegraph/ TradingView
According to analysts, “A lack of new projects or builders moving to ETH, primarily due to high operating fees, is likely the principal reason behind the lackluster performance of ETH. […] We believe that for ETH, $1,800 will be a strong level to watch.” They also indicated that the current sell-off is part of a broader market correction affecting all risk assets.
Moreover, investors are cautious of an impending bear market cycle that could deviate from the traditional four-year crypto market patterns. Bitcoin, meanwhile, is also at risk of experiencing declines, with predictions suggesting it could drop to $70,000, as cryptocurrencies and global financial markets endure what some analysts call a “macro correction.”
ETF Outflows Impacting Ether’s Recovery
Continued outflows from Ether ETFs pose further challenges for Ether’s market recovery. Stella Zlatareva, editor at Nexo, noted, “ETH’s 20% decline last week pushed its price below the key $2,200 trendline that had supported its bull market recovery since 2022. The modest price action may be attributed, as with Bitcoin, to ETFs.” Recent reports indicate that U.S. spot Ether ETFs have endured their fourth consecutive week of net negative outflows, totaling over $119 million during the previous week.
Total spot Ether ETF net inflow. Source: Sosovalue
Despite the challenges, some market participants remain optimistic about Ether’s future price potential, with forecasts suggesting a cycle top of $6,000 for Ether and $180,000 for Bitcoin in 2025, according to predictions from VanEck.
In conclusion, while Ether faces significant hurdles, including ongoing ETF outflows and macroeconomic pressures, the outlook from some analysts suggests that recovery is still possible. Investors are encouraged to stay informed and monitor developments within the market closely.
