Key Points
Ethereum’s price has recently experienced a significant drop after meeting considerable resistance at the $4,000 mark.
Ethereum’s Market Performance
On Monday, Ethereum (ETH) was trading at $3,340, demonstrating a slight recovery from the previous week’s low of $3,100.
Analysis of seasonality data indicates a possible sharp rebound for Ethereum’s price in Q1 of 2025.
CoinGlass reports that since 2017, Ethereum has shown positive returns in all but two first quarters.
The cryptocurrency’s most notable performance was in 2017 with a 518% increase, followed by a 160% rise in 2021.
The average return for Ethereum in the first quarter since 2017 is 92%, making it the most profitable period of the year for the cryptocurrency.
This is followed by Q2 and Q4, with Q3 typically being the worst period, possibly due to the summer season.
Historical data reveals a trend of Ethereum’s price increasing in the first four months following a US election.
However, it’s important to note that seasonality data is not always a reliable predictor of future performance.
For instance, Ethereum experienced price drops in January of 2024, 2022, and 2019.
Despite this, Ethereum’s price is backed by strong fundamentals.
Spot ETH ETFs have seen significant accumulations by investors, with total inflows exceeding $2.33 billion.
Ethereum’s network, which has generated over $2.44 billion in fees this year, is the second most profitable after Tether.
The network continues to dominate the decentralized finance industry, with a total value of $66 billion, surpassing the combined value of the top ten chains.
Another potential catalyst for Ethereum’s price is the decrease in its futures open interest, which has dropped to $23 billion from a year-to-date high of $28 billion.
The last time Ethereum’s open interest was this low was in November, and the cryptocurrency subsequently bounced back to $4,000.
Ethereum’s Technical Analysis
The weekly chart reveals that Ethereum has strong technicals, as it has maintained a position above the ascending trendline that connects the lowest swings since May 2022.
It has also moved slightly above the 50-week moving average and the first support of Andrew’s pitchfork tool.
Therefore, it’s likely that Ethereum’s price will bounce back in the coming months.
A complete bullish breakout will be confirmed if the cryptocurrency surpasses the triple-top chart pattern at $4,027.
A move above this level could lead to further gains towards the all-time high of $4,860.