Is Ethereum gearing up for a major comeback?

Ethereum (ETH) remains under pressure, struggling to reclaim the $2,800 level after shedding 21% of its value since January 31 as bearish sentiment grips the market.

However, signs of a potential rebound are emerging, with both technical indicators and fundamental factors suggesting a shift in momentum.

At press time, ETH is trading at $2,693, up 1.09% in the past 24 hours. Despite the slight recovery, the second-largest cryptocurrency remains down 2.4% on the weekly chart, reflecting ongoing market uncertainty.

ETH technical indicators hint at a trend shift

An analysis by crypto analyst Ali Martinez has identified a TD Sequential Buy Signal on Ethereum’s weekly chart, a widely followed indicator used to spot trend reversals.

Historically, a ‘Buy 9’ signal on the TD Sequential has preceded strong bullish rebounds, suggesting ETH may be nearing a momentum shift.

For Ethereum to gain bullish traction, it must break above the key resistance zone between $2,800 and $3,000. A decisive breakout could pave the way for a rally toward $3,400 and beyond.

However, failure to hold its recent gains could result in a retest of the $2,550 support level.

Ethereum has already rebounded over 4% in three days, climbing from a low of $2,572 on February 12, further strengthening the possibility of a trend reversal.

Ethereum’s growing dominance in DeFi

Despite its price struggles, Ethereum continues to lead the decentralized finance (DeFi) space, with its total value locked (TVL) reaching 21.7 million ETH on February 14, the highest level since October 2022, according to DefiLlama.

However, while Ethereum’s TVL continues to rise, network activity has slowed. Daily transaction fees recently fell below $1 million for the first time since September 2024, according to Token Terminal, showing a disconnect between TVL growth and actual on-chain activity.

Key catalysts for Ethereum’s potential comeback

Despite declining fees, institutional investors continue to accumulate ETH. According to CoinShares’ February 10 report, Ethereum exchange-traded products (ETPs) absorbed $793 million in inflows last week, surpassing Bitcoin’s (BTC) $407 million for the first time this year.

Notably, on February 14, 2025, the Spot Ethereum ETF recorded a significant inflow of $12.8 million, signaling growing institutional confidence in ETH.

Pectra upgrade set to boost Ethereum’s scalability

Ethereum’s upcoming Pectra upgrade, scheduled for April 2025, is expected to bring major improvements in scalability, transaction speeds, and cost efficiency.

Test runs are already underway, with the Holesky network scheduled for February 24 and Sepolia set for March 5. If successful, the upgrade could attract more developers and projects, further driving demand for ETH.

Staking integration into Spot Ethereum ETF

Moreover, Cboe and 21Shares have submitted a proposal to the U.S. Securities and Exchange Commission (SEC) to integrate staking into their Ether ETF. If approved, it would allow ETF investors to earn staking rewards, potentially attracting broader institutional interest.

Meanwhile, Eric Trump’s recent endorsement of Ethereum has fueled renewed speculative interest, particularly among retail investors. While such endorsements hold little fundamental impact, they often drive short-term buying momentum, adding to Ethereum’s ongoing recovery attempts.

That being said, Ethereum’s short-term trajectory hinges on its ability to break key resistance levels and sustain institutional demand.

With the Pectra upgrade, ETF staking proposal, and increasing institutional inflows in play, Ethereum could be setting the stage for a significant recovery in the coming weeks.

Featured image via Shutterstock

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