Ethereum has experienced a notable over 10% correction from its early-year peaks as the market undergoes a broader retrace, resulting in a dip below the critical $3,300 support level. Despite this downturn, some experts remain hopeful about Ethereum’s performance in the first quarter, anticipating potential new highs on the horizon.
Ethereum recently relinquished its New Year gains, dipping below the $3,320 threshold. This decline followed a market correction that saw Ethereum, the world's second-largest cryptocurrency by market cap, drop 14% from its recent high of $3,744 to levels beneath $3,300.
During an initial rally at the start of the year, Ethereum recovered 20% of its post-correction losses, briefly returning to pre-retracement prices for the first time in nearly three weeks. However, a broader market pullback, marked by Bitcoin’s 7.2% dip in 24 hours, dragged Ethereum down to $3,210. The $3,200-$3,300 range has consistently served as a critical support level since December.
In light of Ethereum's recent trajectory, several analysts believe that the cryptocurrency is developing a significant reversal pattern that may propel its price to new heights. On Wednesday, crypto analyst Rekt Capital observed Ethereum forming a multi-month inverse Head and Shoulders pattern, within the 1-month timeframe. He identified the $3,650-$3,760 area as a crucial resistance zone, just below the $4,000 mark. According to him, this could act as a Neckline for the pattern.
Rekt Capital underscored that this pattern terminates around the $3,000 psychological level, suggesting potential for the development of a right shoulder. Parallel insights came from Miky Bull, who signaled the same forming pattern as Ethereum hovered in the $3,200 range, suggesting a potential $7,000 target. His analysis projects an 87.53% upside in Ethereum’s price, potentially approaching the $7,400-$7,500 range, driven by the bullish structure.
Another expert, Ali Martinez, supported the bullish outlook, asserting that a decline to $2,900 could be extremely favorable for Ethereum. He argued this dip would present an outstanding buy-the-dip opportunity, setting sights on a $7,000 target. Martinez emphasized, however, that the bullish pattern would be invalidated should Ethereum fall below $2,800, where the initial left shoulder formed.
In contrast, other market observers have drawn comparisons between Ethereum’s performance in early 2024 and 2025. They note its initial dip below the year’s opening in January 2024, followed by a recovery the subsequent month.
One analyst remarked on the importance of distinguishing between short-term market fluctuations and broader long-term trends. He expressed a firm belief that the downturn represents a temporary annual shakeout due to overeager leverage by market participants, remaining optimistic about Ethereum’s performance in the first half of 2025. Meanwhile, analyst Crypto Wolf predicted minimal remaining downside, speculating that Ethereum may only retrace a further 4% to 7% before targeting its all-time high (ATH).
At the time of reporting, Ethereum is trading at $3,255, representing a 2.15% decrease on a daily timeframe.