Ethereum's 43% Drop: Signs of Recovery Amidst Technical Indicators

Ethereum (ETH) price has been on a downward trend since December 16, 2024, with a significant 43% decline. As of February 26, 2025, ETH is trading at $2,492, down 0.13% from the previous day, following an 18% crash in the past 48 hours. Despite the recent sell-off, there are signs of stabilization, raising hopes for a potential recovery.

The current price action has brought the 50-day Moving Average (MA) closer to the 200-day MA, increasing the likelihood of a "death cross" formation. This technical indicator suggests that short-term momentum is waning, and bearish momentum is escalating, potentially signaling an incoming correction. However, a bullish divergence in the four-hour chart, with the Ethereum price producing a lower low while the RSI and AO indicators set up a higher low, hints at a potential recovery rally.

If Ethereum price successfully recovers, it will face immediate resistance levels at $2,600 and $2,700. Overcoming these short-term hurdles will allow ETH to revisit the $3,000 psychological level, coinciding with the 50-day and 200-day MAs. Such a bounce would delay the death cross formation. If investor confidence is restored, Ethereum price could even revisit the critical resistance levels at $3,100 and $3,300. However, it is essential to note that this bounce is tied to BTC and the broader crypto market, and if Bitcoin fails to trend higher, Ethereum will likely follow its lead.

Supporting this recovery are two key metrics – ETH Social Dominance and Development Activity. The social dominance metric tracks the social volume of ETH compared to other cryptocurrencies. Since January 2025, the dominance of Ethereum has been growing steadily, with three above-average spikes at the start of the year and in February. This shows that the interest in Ethereum is growing. Additionally, the exponential growth of the development activity of ETH, which has doubled since the start of 2025 and currently sits at 319, is a bullish development.

All in all, the outlook for Ethereum price has shown bull