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Ethereum started the new year with a strong performance, falling more than 9% in just a few days. The rally has brought renewed optimism to the market, especially among analysts and investors who have been concerned about Ethereum’s long-term underperformance compared to Bitcoin. In recent months, ETH has struggled to maintain momentum, leading many to question its near-term strength.
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However, top analyst Daan recently shared an insightful chart that changed the narrative. According to Daan, Ethereum has historically shown significant activity during the first quarter of the year, even at times when it lagged behind Bitcoin. This trend underscores Ethereum’s ability to recover as the market shifts in its favor.
While Ethereum’s price action is gaining momentum, the next few weeks will be critical. Investors are watching closely to see if ETH can maintain this momentum and regain dominance within the altcoin space. The overall market sentiment suggests that 2025 could be an important year for Ethereum, and the trend of Q1 may set the tone for an incredible run to come.
Ethereum Starts The Year With Hope
Ethereum has started 2025 on an optimistic note, with investors and analysts watching closely to see if this momentum can last. Although the start of the year has been strong, Ethereum’s performance will need to break away from past trends of Bitcoin-related underperformance to really thrive in the coming months.
Top analyst Daan recently shared a detailed analysis of the ETH/BTC ratio on X, highlighting the historical significance of Q1 for Ethereum. According to Daan, Ethereum often sees great action during this period, even in years when it lags behind Bitcoin.
During the last bull cycle in 2020 and 2021, the ETH/BTC ratio experienced a significant peak that coincided with the start of the alt season. This historical data suggests that Ethereum’s performance in Q1 could set the tone for broader market activity.
For Ethereum to build on this promising start, the ~0.04 level of the ETH/BTC ratio stands as an important resistance point. A decisive break above this level would revive investor confidence and potentially lead to significant gains. However, failure to sustain momentum or break through key levels could cause Ethereum to continue a broader trend of relative underperformance.
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The next few weeks will be crucial. If Ethereum can capitalize on this Q1 strength and push past critical boundaries, 2025 could mark a dominant year for the leading altcoin.
Important ETH Testing Zone
Ethereum is trading at $3,595 after reaching a high of $3,629 yesterday, testing a critical level that may determine its short-term direction. The price has shown firmness, retracing since late December, but the bulls now face the challenge of breaking through this key resistance to continue the rally.
This level represents a significant convergence of Ethereum. A break above $3,629, followed by a strong close, could signal the start of a bullish rally, possibly setting the stage for a move to higher targets in the coming weeks. However, the market remains in the recovery phase, with trading activity showing cautious optimism as investors weigh the potential for further upside.
Despite this positive outlook, the way forward may require patience. Consolidation at current levels is likely as the market seeks clarity and momentum. Bulls will need to maintain Ethereum’s position above $3,500 to ensure that the bullish structure remains intact.
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As the market begins to wake up from the seasonal adjustment, Ethereum’s performance at these levels will be critical. A decisive move in either direction could set the tone for the altcoin’s trajectory in the coming months, making this an important time for investors and traders alike.
Featured image from Dall-E, chart from TradingView