Ethereum has faced a rocky start to the year, losing 15% from recent local highs and falling to a low of $3,157. The altcoin leader’s decline comes amid increased market volatility and uncertainty, with many investors re-evaluating their positions following the recent sell-off. However, despite the economic downturn, network data suggests that investor sentiment remains solid.

According to data from IntoTheBlock, Ethereum has seen significant outflows from exchanges this week, with net outflows exceeding $1.4 billion – the highest level since November. Such activity often signals sturdy accumulation trends as investors move their investments from exchanges to icy storage or other portfolios, indicating long-term confidence in the asset.

These significant outflows highlight Ethereum’s resilience even in the face of challenging price action. Analysts are closely monitoring whether these accumulation trends can offset dwindling momentum and spark a recovery in the coming weeks.

With Ethereum trading near critical support levels, the next moves will be key to determining its price direction in 2025. Since bullish seasonality for altcoins often occurs in the years following a halving, many believe Ethereum could soon regain its upward trajectory, provided that it depends on both market conditions and broader macroeconomic factors.

Ethereum is preparing for a rebound

Ethereum has shown signs of recovery after its recent decline and is currently trying to break above the $3,300 level. The altcoin leader faces significant challenges, with a 15% decline from recent highs putting pressure on bullish sentiment. However, key on-chain indicators indicate that Ethereum’s fundamentals remain sturdy, pointing to potential growth in the coming months.

Data from IntoTheBlockshared on X, highlights a significant change: this week, the net outflow of ETH dollars from exchanges exceeded $1.4 billion, the highest level since November. Such significant outflows often signal that investors are shifting their investments away from exchanges, a behavior typically associated with accumulation. This trend suggests that despite the recent bearish price action, confidence in Ethereum’s long-term potential remains intact.

While Ethereum’s recent price action may seem disappointing to some, these accumulating trends provide a bullish base for the asset. Historically, vast currency outflows have preceded significant price increases, as reduced sell-side liquidity can fuel growth momentum when demand increases.

As Ethereum works to regain higher levels, a break above $3,300 could signal the beginning of a more sustained recovery. With sturdy fundamentals and growing investor confidence, Ethereum appears well-positioned for a potentially bullish 2025. However, the asset must cope with the current market volatility to confirm its upward trend.

Testing your weekly demand

Ethereum is trading at $3,250, reflecting the continued struggle to break the $3,300 resistance level. Price action remains uncertain as ETH tests critical weekly demand levels. This area has historically provided sturdy support and if Ethereum manages to close above the $3,100 level, it could pave the way for a significant rebound in the coming days.

The current phase of consolidation highlights a market searching for direction. For the bulls to regain control, Ethereum must break above key resistance levels. Recovering the $3,750 level is crucial to confirming the bullish breakout and signaling a potential uptrend. Such a move would not only restore investor confidence, but also allow ETH to retest higher levels as market sentiment changes.

However, failure to maintain the $3,100 demand zone could lead to further downward pressure, with lower support levels being a likely test. The coming sessions will be crucial as Ethereum moves through these key levels.

As sentiment changes in the broader market, ETH’s ability to stay above critical support zones will determine whether a bullish trend emerges or a prolonged consolidation phase persists. Investors are watching closely as ETH tries to figure out its next significant move.

Featured image from Dall-E, chart from TradingView