TLDR
- ETH price pattern in 2025 mirrors the 2019 cycle during Quantitative Tightening (QT)
- After falling below $2,200, Ethereum has surged 6% to reclaim the $2,300 level
- DeFi metrics on Ethereum show weakness with TVL dropping from $71B to $50B since January
- The upcoming Pectra upgrade may serve as a short-term catalyst for price recovery
- White House Crypto Summit on March 7 could impact ETH price movement
Ethereum’s price action has been drawing attention from analysts who see parallels with previous market cycles. The second-largest cryptocurrency by market cap has recently experienced volatility, dropping below key support levels before staging a comeback above $2,300.
The price movements of Ethereum in early 2025 show striking similarities to patterns observed during the 2019 market cycle. Crypto specialist Benjamin Cowen has highlighted how ETH formed a wedge pattern during the 2019 Quantitative Tightening (QT) period before breaking down.
#ETH is still repeating last cycle through the lens of monetary policy.
In 2019, during QT, a wedge formed that ETH mostly stayed in. It then had a fakeout above it before falling below it.
After #ETH fell below its wedge in 2019, the Fed ended QT shortly after.
When the Fed… pic.twitter.com/fjEjO51BBP
— Benjamin Cowen (@intocryptoverse) March 4, 2025
One key difference between the current cycle and 2019 is the longer duration of QT. Despite this difference, historical patterns suggest Ethereum might be approaching a bottom as the Federal Reserve’s tightening cycle progresses.
On March 5, ETH was trading at $2,134.03, showing a 2.91% decline over 24 hours. Market capitalization stood at $257.34 billion while trading volume increased to $37.24 billion, representing a 28.63% growth.
By March 6, Ethereum had staged a comeback. The price surged 6% to reclaim the $2,300 level, giving investors hope for a potential recovery.
Technical indicators had been showing mixed signals. The MACD line positioned below the signal line indicated bearish momentum. However, the distance between these lines suggested a potential rebound was possible.
The Bull Bear Power indicator reading of -217.27 on March 5 pointed to bearish forces dominating the market. This negative reading confirmed that sellers had more control than buyers at that time.
Analyst Crypto Caesar identified the $2,300 region as a vital support area for Ethereum. This level has demonstrated stability in previous market conditions and will likely influence ETH’s upcoming price movement.
$ETH – #Ethereum is testing the most important support level. pic.twitter.com/GkM8NirmWv
— Crypto Caesar (@CryptoCaesarTA) March 4, 2025
A closer look at Ethereum’s ecosystem reveals some concerns. According to data from DeFi Llama, Ethereum’s total value locked (TVL) dropped to $50 billion in February from a January peak of $71 billion.
Decentralized exchange volumes have also been declining. DEX volume fell from $92 billion in December to $82 billion in February, an 11% decline. This reduction suggests capital is flowing into alternative ecosystems such as layer 2 solutions and Solana.
Network fees on Ethereum have decreased sharply from $142 million in January to just $46 million in February. This drop indicates waning demand for block space on the network.
Pectra Upgrade
The upcoming Pectra upgrade represents a potential catalyst for Ethereum. This upgrade aims to enhance network functionality and fee efficiency, which could boost investor confidence in the short term.
On the technical front, Ethereum continues to trade below the $2,846 resistance level. A squeeze in the Bollinger Bands suggests a possible breakout could be forming, while the relative strength index at 41.40 indicates modest momentum.
Market sentiment remains mixed ahead of the White House Crypto Summit scheduled for March 7. U.S. President Donald Trump has proposed creating a national crypto strategic reserve that would include Ethereum among other cryptocurrencies.
While some view this proposal as a positive sign, analysts caution that insufficient regulatory clarity could turn the summit into a “sell-the-news” event, potentially leading to further price declines.
Ethereum’s immediate price outlook depends on its ability to hold above the reclaimed $2,300 level. A decisive break above $2,846 could open the path to $2,946, while failure to maintain current levels might lead to another test of lower support zones.
