Ethereum (ETH) has staged a strong recovery after dipping to $2,920 on January 13th. Currently trading above $3,100, ETH is showing signs of bullish momentum, potentially paving the way for a new all-time high in 2025.
Accumulation Zone Breakout?
Analysts consider the $2,800-$2,920 range as a crucial accumulation zone for ETH. IntoTheBlock data reveals significant buying pressure within this price range, which has historically served as a strong support level.
CrediBULL Crypto analyst noted that ETH traded within the $2,800-$4,000 range for nearly ten months in 2024, a period often preceding a breakout as seen in the recent Bitcoin rally. A successful rebound from the $3,000 support zone could propel ETH towards the $4,000 level, representing a potential 30% upside.
Rose Premium Signals echoed this sentiment, predicting a swift recovery for ETH from the $2,947.83 support area. Their price targets of $4,103.26, $4,788.46, and $5,568.18 suggest a strong bullish outlook for the cryptocurrency.
Funding Rates Signal Renewed Buying Interest
Ethereum's funding rates, which reflect the cost of carrying long or short positions on perpetual futures contracts, have also rebounded. After falling below $3,000, funding rates turned negative, indicating bearish sentiment. However, a recent recovery in funding rates signals renewed buying interest, suggesting that more traders are going long on ETH, anticipating further price appreciation.
Improved Economic Outlook
The recent news of a more gradual approach to tariffs by Trump's economic advisors has boosted investor confidence. Reduced trade tensions have increased risk appetite, benefiting risk-on assets like cryptocurrencies. The decline in the dollar index and stabilization of global stocks have further supported this trend.
Experts believe that continued economic improvement could lead to interest rate cuts by the Federal Reserve, which would positively impact cryptocurrencies, including ETH.
Key Levels to Watch
Ethereum currently trades near $3,200, with the next significant resistance level at $3,400, which also aligns with the 50-day EMA. A successful break above this level could pave the way for a renewed push towards the $4,000 mark.
Downside Risks
If ETH fails to maintain strength above $3,000, it could retest the $2,800-$2,400 range, a historically strong demand zone where a significant amount of ETH has been accumulated.
January 2025, Cryptoniteuae