Ethereum has faced a tough ride recently, with its market cap plunging by 36% over the past seven weeks. This drop, from $360 billion on December 22, 2024, to $230 billion on February 8, 2025, has significantly reduced the number of ETH tokens in profit since they were first mined. Such a drop has shaken investor confidence, as ETH underperforms compared to other large-cap cryptocurrencies. Even though the no 2 crypto coin is sailing flat Santinent expects this trend to change once the market stabilizes.
What’s Driving the Price Down?
Market intelligence platform Santiment’s analysis suggests that investor sentiment has turned negative, leading to increased selling pressure. Many retail traders are dumping their tokens amid fear, uncertainty, and doubt (FUD). This has caused daily trading volumes to fall by 20%, with only 15.2 million ETH traded on February 8, 2025, compared to the previous monthly average of 19 million. Plus, the number of active addresses and transaction volumes on the Ethereum network have dropped by 12% and 18%, respectively, signaling reduced activity and demand.
Technical Indicators Flash Bearish Signals
On the technical front also it is turning bearish, the key indicators like RSI for ETH/USD is sitting at 32, indicating an oversold market that might bounce back soon. However, the Moving Average Convergence Divergence (MACD) shows a bearish crossover, confirming the ongoing downward trend. Meanwhile, widening Bollinger Bands suggest increased volatility and the potential for more price swings. Meanwhile, ETH dipped to $2,140 this week but rebounded to $2,620, still 37% below its December peak.
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Is There a Silver Lining?
While things look weak, there might be a silver lining. Crypto analyst Maxpain highlights that Ethereum’s Network Realized Profit/Loss (NPL) metric signals capitulation. Historically, such moments are often a sign of strong price rebounds. Furthermore, whale transactions (over $100,000) have been on the rise since late January, hinting that large investors are quietly accumulating ETH, possibly preparing for a future rally.
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FAQs
Ethereum is bearish, but signs of whale accumulation hint at a rebound. Consider market trends and risk before buying or selling.
ETH is crashing due to negative investor sentiment, lower trading volumes, and bearish technical indicators, leading to increased selling pressure.
Yes, you can buy a fraction of ETH for $1 on most exchanges, as Ethereum is divisible up to 18 decimal places.
ETH price is influenced by demand, network activity, investor sentiment, technical indicators, and macroeconomic factors.
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