Ethereum (ETH) has begun to rise after dropping to the $3,100 support area last week. The second-largest cryptocurrency is attempting to break its downtrend, and some market observers believe it will see a significant increase in 2025.
Ethereum needs to reclaim key levels
With only a week left in 2024, some market observers have begun predicting the potential performance of the cryptocurrency market next year. Despite recent pullbacks, some analysts predict that Ethereum will perform excellently in 2025.
The king of altcoins has been struggling to turn the $4,000 level into a support level. After breaking this level earlier this month, ETH has been rejected three times. The most recent attempt occurred a week ago when Ethereum surged to $4,100, followed by a 7.3% pullback.
As Bitcoin (BTC) fell to $92,000, the second-largest cryptocurrency continued its free fall, dropping to the $3,100 support area, reaching its lowest price in a month. Since then, Ethereum has been hovering between $3,200 and $3,550 but has failed to break above the higher range of the price range in the past four days.
However, the cryptocurrency has broken its downtrend line and is attempting to reclaim the $3,500 support level. A cryptocurrency analyst pointed out that after reclaiming the $3,400 support level, ETH seems to have broken through and re-tested its week-long downtrend.
According to the post, this 'complete breakout' of the downtrend could lead the cryptocurrency to re-test higher levels. Ali Martinez emphasized that ETH's next major support area lies between the price range of $3,032 and $3,132, where 3.69 million addresses purchased 4.85 million ETH.
Meanwhile, Ethereum's next major resistance level is between $3,640 and $3,740, where over 2 million addresses purchased about 4.3 million ETH. Martinez believes, 'Whether Ethereum continues to stay outside of this no-trade zone will determine its trend direction.'
Will ETH continue the performance from 2021?
Analyst Ted Pillows pointed out, 'The first four months after the U.S. elections are usually very favorable for ETH.' According to the chart, Ethereum experienced significant growth in the first three months after the U.S. elections in 2016 and 2020.
In 2017, Ethereum's first month saw an increase of 31.92%, while in January 2021, it surged 78.51%. In both years, ETH's monthly performance peaked between March and April, with returns of 214% and 44% in 2017 and 2021, respectively.
If Ethereum repeats this historical performance, its price could break the historical high (ATH) of $4,878 in January and continue to rise throughout the remainder of the first quarter.
Cryptocurrency trader Immortal pointed out that Ethereum's recent performance resembles its price movements from 2020 to 2021. According to the chart, ETH saw a significant increase at the beginning of 2021, then consolidated in a new range. This was followed by a breakout and a sharp decline, re-testing the consolidation area.
However, when ETH reclaimed its breakout level in 2021, the cryptocurrency continued to rise to the previous high of $4,300 and eventually reached its current peak by the end of the year.