Ethereum, the second-largest cryptocurrency by market capitalization, had a tender 2024, underperforming against Bitcoin and many altcoins throughout the year. However, as 2025 begins, Ethereum is starting to show signs of recovery, gaining over 10% in less than a week. This early gain has revived hope among investors and analysts who see the potential for powerful results this year.

Top analyst Maartunn recently shared insightful data highlighting the continued trend of aggressive shorting in Ethereum markets. According to Maartunna, taker sellers dominate the market, outselling taker buyers by more than $350 million a day. This aggressive shorting could explain Ethereum’s tender performance in 2024, as continued selling pressure has likely hampered its upside momentum.

With Up-to-date Year’s optimism, many believe that this shorting trend may begin to change, creating conditions for Ethereum to regain market leadership. As the altcoin leader continues to overcome its challenges, the coming weeks will be crucial in determining whether this early rally signals the start of a more sustained uptrend. Investors are keeping a close eye on Ethereum, anticipating that a reversal of these bearish trends could lead to a stellar 2025 for the network.

Ethereum is rising amid aggressive shorting trends

Ethereum is trying to break above its 2024 high, but a decisive breakout remains elusive. Recent price action indicates the potential for a rally, with ETH seeing early gains in 2025. However, the path forward is unclear as the altcoin leader continues to face significant selling pressure.

The best analyst Maartunn recently shared insightful data from CryptoQuantshedding lithe on the current market dynamics. According to the data, Ethereum is being aggressively shorted, with taker sellers dominating trading activity. There is over $350 million more pressure on the sell side than on the buy side every day, creating a arduous environment for ETH to break out of its current range.

This trend, although suppressing prices in the tiny term, cannot continue indefinitely. In market cycles, such aggressive shorting is often a precursor to a reversal when sellers run out of momentum and buying pressure begins to build. Long-term investors are reportedly viewing this phase as an opportunity as they prepare to take advantage of Ethereum’s relatively low prices.

As Ethereum navigates this active, the next few weeks will be crucial. A tidy break above last year’s high could signal the start of a broader rally, sparking renewed interest and potentially reversing the ongoing shorting trend. For now, ETH remains at a crucial juncture.

Price testing at key levels

Ethereum is trading at $3,650 after a solid start to 2025, gaining significant traction early in the year. Price recently broke above the 4-hour EMA 200 with impressive strength, a technical indicator often viewed as a critical threshold for long-term trends. ETH is currently testing the 200 MA on the same time frame, which is a level that could confirm a bullish trend if recovered and held as support.

A powerful daily close above the 200 MA would solidify Ethereum’s bullish momentum, potentially paving the way for a massive rally to challenge and exceed last year’s highs. Such a move would likely revive market sentiment and attract additional buying pressure, pushing Ethereum to up-to-date highs in the near term.

However, the bullish outlook is not without risks. If Ethereum fails to hold the 200 MA level as support, the market may see a renewed wave of selling pressure. This would likely push ETH back toward lower levels, diluting recent gains and prolonging the struggle to regain upward momentum.

Featured image from Dall-E, chart from TradingView