Ethereum, the second largest cryptocurrency by market capitalization, has faced a challenging 2024, underperforming compared to Bitcoin (BTC). However, crypto analysts are optimistic that ETH could experience a significant bull run in the first quarter of 2025. This outlook stems from historical trends, market momentum, and reduced leverage positions, all pointing to potential bullishness for Ethereum.

Correlation with the Bitcoin Halving cycle

A key factor driving optimism towards Ethereum is its historical correlation with Bitcoin's four-year halving cycle. Although ETH underperformed in 2024, analysts believe that the aftermath of Bitcoin's milestone on December 6—reaching $100,000 for the first time—could pave the way for Ethereum's growth. Historically, Ethereum has lagged behind Bitcoin by about eight months after the halving before entering a significant bull phase.

Renowned crypto analyst Venture Founder has noted this cyclical relationship and pointed out that Ethereum often underperforms compared to Bitcoin right after halving events but tends to recover strongly afterward.

Market reset and reduced leverage

A recent market collapse, witnessing significant liquidations of ETH positions, may have inadvertently set the stage for a healthier bull run. According to a joint report by Bybit and Block Scholes, "reset indicators" for leveraged long positions have declined significantly. Analysts suggest that this reduction in leverage could serve as a catalyst for ETH to reach new all-time highs in 2025.

The report states, "The reduction in leverage could push ETH to an all-time high in the first quarter of next year." This aligns with the general market expectation that the cryptocurrency space is transitioning to a more sustainable growth phase after the speculative frenzy of 2024.

Key resistance levels and price predictions

For Ethereum to begin the anticipated bull run, it must first surpass the psychological resistance level of $4,000 and break through the $4,100 mark. Crypto analyst Long Investor emphasizes the importance of these levels, predicting that once ETH exceeds $4,100, it could quickly rise to $4,865.

Looking ahead, Long Investor suggests a long-term target of $8,800, reinforcing their strategy of holding ETH through potential volatility. This price prediction reflects growing confidence in Ethereum's ability to deliver strong returns as market conditions stabilize.

Comparative performance: BTC vs ETH

Data from Cointelegraph highlights the stark contrast between Bitcoin and Ethereum over the past six months. While BTC has increased by over 54% during this period, ETH's gain has been a modest 12%. Analysts predict that this gap could reverse in 2025 as Ethereum benefits from market shifts and renewed investor confidence.

Broader implications for the cryptocurrency market

The broader cryptocurrency market is closely monitoring Ethereum's performance as a bellwether for altcoins. As Bitcoin continues to dominate headlines with record-breaking achievements, Ethereum's potential breakout may reignite interest in the altcoin space.

Conclusion section

Ethereum's path towards a potential all-time high in 2025 depends on several factors, including its correlation with Bitcoin's halving cycle, reduced market leverage, and the ability to overcome key resistance levels. While 2024 is a consolidation year for ETH, the groundwork laid during this phase could set the stage for a transformative bull run. Investors and analysts are currently looking towards the first quarter of 2025 as a crucial moment for Ethereum's resurgence in the cryptocurrency market.

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