Ethereum Price Forecast – Why Ether Could Be on the Verge of a Breakout to $3000

Highlights:

• Ethereum is trading in a narrow range, which usually forms before a breakout
• Breakout could trigger a rally to $3000
• Ethereum breakout could be triggered by increased whale buying

Ethereum, the largest altcoin in the market, has lagged the broader market for months now. While Solana and XRP have shown impressive gains, Ethereum has underperformed and is yet to retest its 2021 all-time highs.

In the day, Ethereum is showing little to no movement,t reflecting the subdued price action across the market. At the time of going to press, Ethereum was trading at $2652.8, down by 0.62%.

Most Ethereum Holders Trading at a Loss

Recent on-chain data indicates that most investors who hold ETH are at a loss. Further down the ETH market, the supply of ETH in profit has diminished significantly. This is primarily a result of sharp losses suffered by the entire cryptocurrency market in recent weeks.

Santiment, an analytics firm, reports that Ethereum’s profit supply is currently the lowest it’s been since November 4, 2024. Those holding ETH in profit, have also dropped drastically by almost 30 percent, now sitting at 65.5%. Which is a far cry from 97.5% back in early December. The intensified sell pressure has cut down on Ethereum bulls. It has also almost erased most retail holders from the Ethereum ecosystem.

Ethereum's market cap has dropped -36% since its local high just 7 weeks ago. The result has been a stark drop in the amount of ETH tokens in profit since their date first mined. On the daily close, we are seeing the lowest percentage in profit in over 4 months, and lowest… pic.twitter.com/ze8uVeWqfA

— Santiment (@santimentfeed) February 8, 2025

Ethereum Facing Stiffer Competition

Besides broader market factors, Ethereum is struggling because of the competition it is facing from other L1s. For instance, Solana has been gaining in popularity and is taking the shine away from Ethereum in DeFi and NFTs.

The SOL/ETH trading pair is currently beating ETH in profits, having surged 1,025% over the last 2 years. It is a clear indication that the market favors Solana over Ethereum. This is likely to make it harder for Ethereum to retest its all-time highs.

Ethereum PoS Not Having a Deflationary Effect

Furthermore, Ethereum’s adoption of proof-of-stake does not seem to be giving the anticipated deflationary impact. Supply growth did slow down, but it didn’t reduce enough to have a positive impact on the prices. Hedge funds have also made notable short bets on Ethereum, surging by 500% since November 2024. This adds to the downside and makes it harder for Ethereum to rally, especially when the broader market is in a state of uncertainty.

What is happening with Ethereum?

Short positioning in Ethereum is now up +40% in ONE WEEK and +500% since November 2024.

Never in history have Wall Street hedge funds been so short of Ethereum, and it's not even close.

What do hedge funds know is coming?

(a thread) pic.twitter.com/knsyOhYyyt

— The Kobeissi Letter (@KobeissiLetter) February 9, 2025

Ray of Hope – Whales Starting to Accumulate Ethereum

While all this sounds bearish, it could be an indicator that Ethereum has hit the bottom, and the only way from here is up. Several factors point to a possible Ethereum bottoming out.

One of them is whale accumulation. Long-term investors seem to be accumulating Ethereum despite its price fluctuations. Ethereum holder addresses received inflows on February 7, accumulating a record 330,705 ETH, valued at around $883 million. This implies that large still have faith in Ethereum’s future.

According to the on-chain analytics, Ethereum whale addresses now hold 54% of all ETH. In the past, an increase in whale addresses has led to a sharp increase in prices. This hints at the possibility of a bull run ahead of Ethereum.

Retail and Institutional Sentiment for Ethereum Price Bouncing Back

Retail sentiment for Ethereum is also making a comeback. Retail investors categorized between the 10,000 and 100,000 ETH bracket are starting to accumulate Ethereum and hold it for longer.

Interest from institutional investors through ETFs is also on the rise. Institutional inflows into Ethereum ETFs are on the rise, something not experienced since November 2024, when there was widespread hope in the crypto market due to Donald Trump’s reelection.

The $ETH inflows are at the same levels as in November 2024.

It has never been a more obvious buy! pic.twitter.com/Mr7l2RbY3J

— Coinvo (@ByCoinvo) February 8, 2025

Technical Analysis – Ethereum Price on the Verge of a Breakout

From the charts, Ethereum is trading in a narrow range with volumes dropping significantly. This is an indicator that a breakout is on the horizon for Ethereum. That’s because a slight increase in either buying or selling volumes could move the price in either direction.

If there is a surge in buying volumes and there is a rally through the $2665.8 resistance, then a rally to $3033 could follow. On the other hand, if selling volumes increase and push Ethereum through the $2551.8 support, then a correction to $2400 could follow.