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Ethereum started the new year with a strong performance, rising by more than 9% in just a few days. This rally has led to renewed optimism in the market, especially among analysts and investors who have become concerned about Ethereum’s prolonged underperformance compared to Bitcoin. Over the past months, ETH has struggled to maintain momentum, leading many to question its near-term potential.
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However, senior analyst Dan recently shared an insightful chart that changed the narrative. According to Dan, Ethereum has historically shown significant activity during the first quarter of the year, even in periods where it has lagged behind Bitcoin. This trend underscores the potential for Ethereum to rebound as market dynamics shift in its favor.
While Ethereum price action is gaining strength, the next few weeks will be crucial. Investors are watching closely to see if ETH is able to maintain this momentum and regain dominance in the altcoin space. Overall market sentiment suggests that 2025 could be a pivotal year for Ethereum, with the first quarter trend likely setting the tone for an impressive rally ahead.
Ethereum’s start to the year sparks optimism
Ethereum has started 2025 on an optimistic note, with investors and analysts watching closely to see if this momentum can continue. Although it had a strong start to the year, Ethereum’s performance will need to break away from previous trends of underperformance compared to Bitcoin to truly thrive in the coming months.
Senior analyst Dan recently We shared a detailed analysis of the ETH/BTC ratio on Xhighlighting the historical importance of the first quarter for Ethereum. According to Dan, Ethereum often saw a big move during this period, even in years where it lagged behind Bitcoin.
During the previous bull cycle in 2020 and 2021, the ETH/BTC ratio saw significant spikes that coincided with the start of an alternative season. This historical data suggests that Ethereum’s performance in the first quarter could set the tone for broader market activity.
For Ethereum to build on this promising start, the ~0.04 level in the ETH/BTC ratio represents a critical resistance point. A decisive break above this level could reignite investor confidence and potentially lead to significant gains. However, failure to maintain momentum or break beyond key levels could cause Ethereum to continue the broader trend of relatively poor performance.
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The next few weeks will be crucial. If Ethereum can build on this Q1 strength and cross critical thresholds, 2025 could represent a breakout year for the leading altcoin.
Critical ETH testing area
Ethereum is trading at $3,595 after hitting a high of $3,629 yesterday, testing a critical level that could determine its short-term trend. The price has shown resilience, rebounding from the late December low, but the bulls now face the challenge of breaking through this significant resistance to maintain bullish momentum.
This level represents a critical turning point for Ethereum. A break above $3,629, followed by a strong close, could signal the start of an upside rally, which could pave the way for a move towards higher targets in the coming weeks. However, the market is still in the recovery phase, with trading activity reflecting cautious optimism as investors consider the possibility of continued upward movement.
Despite this positive outlook, the path forward may require patience. Consolidation is possible around current levels as the market seeks clarity and momentum builds. The bulls will need to maintain an Ethereum position above $3,500 to ensure the bullish structure remains intact.
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As the market begins to wake up from the seasonal correction, Ethereum’s performance at these levels will be critical. A decisive move in either direction could set the tone for the altcoin’s trajectory in the coming months, making this an important moment for investors and traders alike.
Featured image by Dall-E, chart from TradingView
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