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Ethereum, the second-largest cryptocurrency by market cap, has had a lackluster performance in 2024, underperforming against Bitcoin and several altcoins throughout the year. However, at the beginning of 2025, Ethereum began to show signs of recovery, rising more than 10% in less than a week. This early rise has revived hope among investors and analysts who see the possibility of a strong performance this year.
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Senior Analyst Maartunn recently shared insightful data highlighting the ongoing trend of aggressive short selling in the Ethereum markets. According to Marton, take sellers were dominating the market, outpacing buyers by more than $350 million a day. This strong short selling could explain Ethereum’s poor performance in 2024, as continued selling pressure will likely suppress bullish momentum.
With optimism in the new year, many believe that this short-selling trend may begin to turn, creating the necessary conditions for Ethereum to regain its position as a market leader. As the altcoin leader overcomes its challenges, the coming weeks will be crucial to determining whether this early rally represents the beginning of a more sustainable upward trend. Investors are watching Ethereum closely, anticipating that a reversal of these downward trends could lead to a stellar 2025 for the network.
Ethereum rises amid aggressive short selling trends
Ethereum is trying to rise above its 2024 high, but a decisive breakout is still a ways off. Recent price action suggests bullish potential, with ETH making early gains in 2025. However, the path forward is not clear, as significant selling pressure continues to weigh on the altcoin leader.
Senior analysts Maartunn recently shared insightful data from CryptoQuanthighlighting current market dynamics. According to the data, Ethereum is experiencing intense short selling, with short sellers dominating the trading activity. Over $350 million more sell pressure than buy-side activity is being recorded daily, creating a difficult environment for ETH to break out of its current range.
Although this trend suppresses prices in the short term, it cannot continue indefinitely. Market cycles often see such aggressive short selling as a prelude to a reversal, as sellers run out of momentum and buying pressure begins to build. Long-term investors are reportedly viewing this phase as an opportunity, and are positioning themselves to take advantage of Ethereum’s relatively low prices.
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As Ethereum navigates these dynamics, the next few weeks will be crucial. A clear break above last year’s high could signal the start of a broader rally, attracting renewed interest and possibly reversing the ongoing short-selling trend. Right now, ETH is still at a pivotal juncture.
Test prices critical levels
Ethereum is trading at $3,650 after a strong start to 2025, gaining significant momentum in the early days of the year. The price recently broke above the 4-hour EMA with impressive strength, a technical indicator that is often viewed as a critical threshold for long-term trends. ETH is now testing the 200 moving average on the same time frame, a level that could confirm the uptrend if reclaimed and held as support.
A strong daily close above the 200 MA would boost Ethereum’s bullish momentum, potentially paving the way for a massive rally to challenge and surpass last year’s highs. Such a move would likely revitalize market sentiment and attract additional buying pressure, pushing Ethereum to new levels in the near term.
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However, the bullish outlook is not without risks. If Ethereum fails to hold the 200 EMA as support, the market may see a renewed wave of selling pressure. This will likely push ETH towards lower levels, eroding recent gains and prolonging its battle to regain upward momentum.
Featured image by Dall-E, chart from TradingView