Ethereum faces significant challenges as its market capitalization has dropped by 36% over the past seven weeks. This puts pressure on traders and investors adjusting to the new situation.
Decline in Ethereum Market Cap
According to data, Ethereum's market cap has fallen by 36% over the past seven weeks, reaching levels last seen in late 2024. This decline has reduced the percentage of Ethereum tokens in profitable positions to a four-month low, with only 54% of addresses holding gains. Retail traders are actively selling ETH due to underperformance compared to Bitcoin and Solana.
Market Sentiment and Historical Parallels
Social media analysis shows a 40% increase in bearish Ethereum discussions since January 2025. Despite Bitcoin trading near $97,000 and Solana at $200, the market atmosphere remains subdued. Analysts draw parallels to past crises like the Terra and FTX collapses. Meanwhile, open interest in Ethereum futures has risen by 18% since January.
The $2,500 Level: A Test for Ethereum
Ethereum's price hovers near the $2,500 support level, which could dictate future price movements. The $2,500 level serves as an important test: holding it could attract sidelined capital, but a drop below could deepen losses. This creates tension between technical and psychological market aspects.
Ethereum is in a challenging position, requiring a balance between technical support levels and shifting investor sentiment. Its future will depend on its ability to adapt to these challenges.
