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Ethereum Sentiment Drops to a Yearly Low
Ethereum (ETH), the second-largest cryptocurrency by market capitalization, is facing challenges as market sentiment hits its lowest point in a year. Despite the current negative outlook, some analysts remain optimistic, suggesting that Ethereum may soon embark on a bullish trend.
According to crypto analyst Ali Martinez, the social sentiment surrounding Ethereum has reached its most negative levels since December 2023. Back then, ETH was trading around $2,100-$2,200. Martinez highlights this as a “classic bullish indicator,” pointing out that a significant price rally occurred after sentiment hit “rock bottom” last year. ETH’s price surged approximately 30% in the subsequent weeks, climbing to $2,700 by January 12, which was a pivotal point in its rally to the March high of $4,093.
Potential for a Bullish Run
If Ethereum follows a similar pattern this year, the cryptocurrency could potentially reach the $4,900-$5,000 range in the coming month. This move could transform the next major resistance level into support within a fortnight, according to Martinez. He also suggests that Ethereum’s rally could gain momentum once it surpasses the $4,100 resistance level, a milestone not reached since December 2021. Once this threshold is crossed, the $6,000 mark might act as a magnet for further price increases.
Despite its recent difficulties in maintaining the $4,000 level as support, Ethereum’s latest breakout attempt coincided with Bitcoin (BTC) surpassing its previous all-time high. While BTC traded above $107,000, Ethereum briefly surged to $4,100 before retracing to $3,900 and subsequently correcting to the $3,800 level. Nevertheless, ETH still shows gains in both weekly and monthly timeframes, with increases of 2.3% and 22.6%, respectively.
Will ETH Break Past $4,000 This Month?
Altcoin Sherpa has drawn comparisons between Ethereum’s current position and Bitcoin’s performance when it was around the $70,000 mark, noting that ETH hasn’t materially broken this level for several years. Over the past three years, Ethereum has faced rejection at the $4,000 level multiple times but eventually reached its all-time high in 2021.
If ETH follows Bitcoin’s trajectory, it could potentially revisit its $4,800 ATH before targeting a new price discovery level of around $5,000. Analysts believe that December and January are historically favorable months for the Altcoin market, which could further bolster Ethereum’s performance.
ETH/BTC Pair Dynamics
Benjamin Cowen has previously noted that ETH’s pair against BTC continues to follow a familiar pattern, historically gaining strength between December and January. However, Sherpa predicts that the ETH/BTC pair may experience one “final shakeout” before entering a period of upward movement lasting several weeks or months. To achieve this, Ethereum must surpass its recent 0.041 high.
Trader and analyst Skew cautions that overcoming the $4,000 resistance will require substantial buying pressure, as this price level is heavily defended by sellers. Additionally, maintaining the $3,800 level is crucial for sustaining the rally.
As of the time of writing, Ethereum is trading at $3,874, marking a 2% decline on the daily timeframe.
