TLDR
ETH sentiment has reached a yearly low according to Santiment, which could signal a potential market turnaround
Ethereum is down over 20% in the last month, underperforming Bitcoin which dropped only 10%
Analysts suggest extreme bearish sentiment often coincides with market bottoms and may precede significant rebounds
Trump family-backed World Liberty Financial increased Ethereum holdings by $10 million in a week
ETH is currently facing resistance at $2,220, with key support levels at $2,100 and $2,050
Ethereum, the second-largest cryptocurrency by market cap, has been experiencing a period of price weakness and declining social sentiment. Data from blockchain analytics firm Santiment shows that trader sentiment toward Ether has hit its lowest point of the year. This comes as ETH has dropped over 20% in value during the past month.
The price decline has been more severe than that of Bitcoin. While ETH trades around $2,176, BTC has only fallen about 10% in the same timeframe. This difference in performance has contributed to the negative sentiment across social media platforms.
Santiment tracks discussions about Ethereum across various social channels including X (formerly Twitter), Reddit, and Telegram. Their analysis reveals a shift from the bullish sentiment seen during last year’s crypto bull market to the current bearish outlook that began after September.
Market experts suggest this pessimism might actually be a positive signal. Santiment noted in a March 5 post on X that “the bearishness being projected across social media is a good sign of a potential turnaround once crypto markets stabilize.”
🐻 Ethereum sentiment has declined to year-low levels as the asset has underperformed relative to other top caps. For those patiently holding their $ETH, the bearishness being projected across social media is a good sign of a potential turnaround once crypto markets stabilize. pic.twitter.com/iRaKTvb0Tu
— Santiment (@santimentfeed) March 6, 2025
Mike Cahill, CEO of Douro Labs, emphasized the importance of separating short-term market narratives from long-term fundamentals. He told Cointelegraph that historically, extreme bearish sentiment has often marked market bottoms, as price movements tend to lead sentiment rather than follow it.
Cahill remains optimistic about Ethereum’s prospects. He believes that if crypto markets find stability, “Ether is well-positioned to benefit from renewed liquidity and continued institutional interest.”
Growing Institutional Support
This view is shared by Dominick John, an analyst at Kronos Research. John points out that while Ethereum’s recent performance may discourage short-term investors, extreme negativity often signals the bottom of a market cycle.
Several factors could help trigger an ETH price recovery. These include decreasing interest rates or clearer regulatory developments around staking ETH within ETFs. John also noted the continued buying by institutional players as a positive sign.
One example of institutional interest comes from World Liberty Financial (WLFI), a DeFi platform backed by the Trump family. WLFI has reportedly increased its Ethereum holdings by $10 million over a seven-day period, signaling growing long-term confidence in the asset.
Technical indicators are also providing some hope for ETH holders. Ethereum’s MVRV Z-Score, which helps assess whether the token is overvalued or undervalued, has dropped to its lowest level in 17 months. The last time this score hit similar lows was in October 2023, just before ETH rebounded by almost 160%.
Previous dips in this metric during December 2022 and March 2020 also preceded bull runs. This historical pattern suggests the current low score could be a precursor to a price recovery.
Some analysts point to structural issues affecting Ethereum’s performance. Jack Tan, co-founder of Woo X crypto exchange, attributes ETH’s struggles to weakening network activity and declining total value locked (TVL).
Tan explains that Ethereum’s lower layer-1 transaction volume compared to previous peaks has reduced the burn rate. This weakens its deflationary impact. Additionally, competition from high-performance layer-1 blockchains like Solana has fragmented the ecosystem.
The shift of activity to layer-2 solutions has also reduced demand for ETH as a settlement layer. According to Tan, Ethereum previously benefited significantly from the DeFi boom, but this advantage has diminished.
Looking at short-term price action, Ethereum recently attempted to break above the $2,320 resistance level but failed. The price has since retreated and is now trading below $2,220 and the 100-hourly Simple Moving Average.
Technical analysis shows that ETH broke below a key rising channel with support at $2,220. The price found a low at $2,103 and is now attempting a recovery. It has moved above the $2,120 and $2,150 resistance levels but faces hurdles near $2,220.
If Ethereum can clear the $2,220 and $2,320 resistance levels, it could start a decent increase. The next major resistance would be near $2,420. Breaking above this could push the price toward $2,500 or even $2,550 in the near term.
However, if Ethereum fails to clear the $2,220 resistance, it could start another decline. Initial support is near $2,100, with major support at $2,050. A break below these levels could send the price toward $2,000 or even $1,880 in the near term.
For now, ETH holders are watching these key price levels while analysts continue to debate whether the extreme bearish sentiment marks a bottom or if more downside is ahead.
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