At the beginning of the month, there was a sharp sell-off of ETHUSD, not related to any fundamental factors. This only illustrates the asset's high volatility and risks of losing market share to other alternatives.
The price of Ethereum paired with the US dollar is slowly rebounding after the fall. Over the week, the exchange rate rose from 2,664.82 at the close of trading on Monday to 2,682.31 at the opening on Thursday.
Such a surge can be driven by a few key aspects. First of all, Goldman Sachs, one of the major financial players, increased its investments in Ethereum-ETF by 2000% to $476 million. This kind of interest from professional market participants creates favorable conditions for Ethereum.
In addition, the cryptocurrency is supported by purchases from World Liberty Financial, a company associated with Donald Trump. This gives the altcoin more political weight.
On February 11, an important technology update related to the launch of Unichain from Uniswap Labs took place. This second-tier solution may bring up to $500 million in annual revenue through fee optimization. However, there is a flip side to the coin: while the new platform provides new opportunities to utilize the network and attract new users, the migration of most Uniswap transactions to a separate blockchain could slow down the process of burning ETH, increasing inflationary pressure on the currency.
Experts are also concerned that the project may face stagnation without active development of the ecosystem. In a competitive environment among altcoins, Ethereum must constantly implement innovations in order to maintain its leading position.
Earlier, the volume of transaction fees has already reached the lowest level since September 2024, indicating a decline in user activity on the network. This creates additional pressure on the price of the asset. Hedge funds significantly increased short positions on ETH by six times since November, showing higher interest in selling the asset.
In terms of technical analysis, the market situation looks uncertain. The RSI is approaching the overbought zone, which may indicate a probable correction or a slowdown in the decline. However, in order to confirm the reversal additional signs are needed. The divergence between the MACD line and the signal line is not reducing, which confirms the persistence of the current downtrend.
The price volatility may fade in the future, and the prices will try to correct, but for now no significant growth is expected.
Current recommendation:
Buy at current price if rebound is confirmed. Take profit - 2,900. Stop loss - 2,550.
This content is for informational purposes only and is not intended to be investing advice.
