Key Points
Ethereum’s Price Decline: A Signal for Rebound?
Ethereum’s (ETH) recent price drop is indicative of a potential rebound. Matrixport, a blockchain firm, suggests this based on the current levels of Ethereum’s price. They released a research note on February 11, indicating that the Relative Strength Index is hinting at oversold conditions. These conditions often suggest a potential price recovery.
However, the sentiment around Ethereum remains wary. Short interest in Ethereum has seen a significant increase of 500% since November 2024. Moreover, in just the past week, this interest has risen by another 40%.
This increase in short positions implies that investors are bearish on Ethereum. They are betting against ETH. Yet, this situation could also lead to a short squeeze, potentially driving the price upwards.
Investments in Ethereum Despite Price Struggles
Despite struggling prices, Ethereum has seen substantial inflows into its spot exchange-traded funds. Even with an influx of $500 million into spot Ethereum ETFs, the price remains stagnant. It is still significantly below its all-time high from November 2021.
However, long-term investors, including groups like the World Financial Liberty associated with President Donald Trump, continue to purchase more Ethereum. This suggests a belief in Ethereum’s potential future growth.
The recovery of Ethereum remains uncertain. However, Matrixport suggests that the planned testnet deployments of Pectra in March could serve as potential “bullish catalysts”. As of the time of reporting, Ethereum is trading at $2,715. Its market capitalization remains at $327.5 billion.
