Ethereum's recent performance has raised concerns among analysts due to a slowdown in the network. The decline in Daily Active Addresses (DAA) and Cumulative Volume Delta (CVD) suggests a potential pullback for the cryptocurrency.
However, some experts believe that Ethereum is in the early stages of recovery and predict that it could reach $15,937 by May 2025. Ethereum recently broke a significant resistance level of $4,000 after a three-year consolidation within an ascending triangle. Despite a slight decrease in price, Ethereum has maintained impressive weekly and monthly gains of 7% and 22% respectively.
However, bearish indicators from on-chain data have led to concerns about the sustainability of these gains. The DAA divergence has dropped to -64.17%, indicating a lack of user engagement that typically supports price surges. Analysts warn that without a shift in this trend, Ethereum's price could dip below the current level of $3,938. The decline in Ethereum's Holding Time since December 6 further complicates the asset's outlook, as it could signal a further decline in price. Additionally, the CVD has entered negative territory, suggesting that selling pressure is currently outpacing buying pressure in the market.
Renowned crypto analyst Benjamin Cowen believes that the ETH/BTC pair is in an early recovery phase, which could lead to significant gains in the coming months. However, he cautions that if momentum wanes in January, it could result in a "sweep of prior lows" for the pair.
Despite potential setbacks, analysts are optimistic about Ethereum's prospects over the next six to nine months. Various analysts have predicted that Ethereum could reach $15,937 by May 2025, aligning with its historical performance. Independent analyst Honey has identified a golden cross formation on the 1-day chart, suggesting that Ethereum is poised for a significant increase in value. The recent performance of US spot Ethereum Exchange Traded Funds (ETFs) also supports the positive sentiment, with inflows surpassing $1 billion. Institutional interest in Ethereum is growing, as seen with the BlackRock Ethereum ETF (ETHA) recording its highest-ever daily inflow of $292 million. Over five consecutive trading sessions, ETHA has accumulated $800 million in inflows.
While Ethereum faces short-term challenges, the long-term outlook appears to be cautiously optimistic, driven by technical indicators and institutional support.