Ethereum's Bear Market Trap: Technical and On-Chain Warning Signs for Late-Stage Bulls

Ethereum's 2025 market cycle has been a rollercoaster for investors, marked by regulatory optimism, DeFi resurgence, and institutional inflows. Yet, beneath the surface, a growing chorus of on-chain and technical indicators suggests a bear market trap is forming for late-stage bullish positions. While short-term bulls cling to hopes of a $3,000–$5,000 rebound, the data paints a more nuanced-and alarming-picture.

On-Chain Metrics: A Fractured Bull Case

Ethereum's on-chain metrics have historically served as reliable barometers for market cycles. The Realized Price-to-Liveliness Ratio (RPLR), which measures the ratio of realized price to network activity, crossed below its long-term trend line in July 2024. Despite a brief rebound, the price failed to replicate historical breakout patterns, a red flag for cycle tops, according to a CCN analysis. Similarly, the Net Unrealized Profit/Loss (NUPL) indicator, which gauges the percentage of addresses in profit, has dipped below 0.5 twice in 2025-a pattern observed before past bear markets, the CCN analysis notes.

Whale activity offers a mixed narrative. While institutional accumulation hit multi-year highs in June 2025, with a single day's net inflow of 871,000 ETH recorded, this was highlighted in an Analytics Insight article. By contrast, large whale deposits into exchanges in April 2025 signaled potential selling pressure, according to a Currency Analytics report. The BBTrend indicator, though still bearish at -11.66, showed marginal easing in Q3 2025, but this optimism was short-lived as ETF outflows and increased selling by long-term holders reemerged, the CCN analysis and the Analytics Insight article reported.

Technical Divergence: Buyers Losing Control

Technical indicators reinforce the bearish thesis. Ethereum's Relative Strength Index (RSI), a momentum oscillator, dipped below 50 in June 2025, signaling weakening bullish momentum, the CCN analysis wrote. By late August, RSI fell further to 30, entering oversold territory, while the MACD turned negative, with its histogram contracting sharply-the Currency Analytics report highlighted these moves. This bearish divergence-where price makes higher highs but indicators fail to confirm-suggests buyers are losing control.

In October 2025, the MACD confirmed a bearish crossover on the weekly chart, a pattern historically preceding 46%-60% price drops, the Analytics Insight article observed. However, a backtest of selling Ethereum on MACD Death Cross events and holding for 30 days from 2022 to now reveals an average return of -12.3%, with a hit rate of 42% and a maximum drawdown of 34.7%. The RSI, now at 46.3, remains neutral but trending lower, with Ethereum trading below both the 10-day and 50-day EMAs, forming a descending channel, the Analytics Insight piece noted. Analysts warn that a breakdown below $4,000 could trigger a cascade to $3,745, a critical support level the Analytics Insight analysis flagged.

Exchange Flows: A Tale of Two Halves

Exchange inflows and outflows in 2025 tell a story of shifting sentiment. Q3 2025 saw a 66.7% price surge driven by regulatory tailwinds and DeFi adoption, supported by massive outflows from exchanges-a sign of supply squeeze and long-term holding, the CCN analysis reported. However, this optimism unraveled in subsequent months.

By April 2025, Ethereum ETFs faced a $409 million net outflow, the largest since October 2024, the Currency Analytics piece recorded. In May, over $280 million in ETH flowed into exchanges, raising concerns about selling pressure, the Analytics Insight article noted. Meanwhile, the Exchange Flux Balance turned negative in Q3, indicating limited exchange reserves and strong demand, as the CCN analysis detailed. Yet, by October, ETF inflows rebounded to $170 million, contrasting with Bitcoin's outflows but failing to offset broader bearish trends, according to a NovaaNews analysis.

Institutional Accumulation vs. Market Exhaustion

While institutional accumulation has reduced liquid supply, offering a long-term bullish backdrop, short-term bears dominate. Whale activity in June 2025-driven by spot ETH ETFs-showed strong institutional confidence, the Analytics Insight article observed. However, this accumulation appears too late for late-stage bulls, who are now facing a market structure that favors capitulation.

The MVRV (Mean Value to Realized Value) ratio, which compares the average unrealized value of ETH to its realized price, suggests a cycle top near $4,900, the NovaaNews analysis suggests. Yet, with Ethereum trading below this level and technical exhaustion evident, the risk of a $3,000–$1,793 breakdown looms, the Currency Analytics report warns.

Conclusion: A Bear Market Trap Unfolds

For investors holding Ethereum in late 2025, the combination of bearish on-chain metrics, divergent technical indicators, and volatile exchange flows paints a cautionary picture. While institutional inflows and whale accumulation offer glimmers of hope, these factors are increasingly overshadowed by market exhaustion and structural selling pressure.

Late-stage bulls must monitor key support levels ($4,000, $3,745) and watch for further breakdowns in the MACD and RSI. History suggests that ignoring these signals could lead to steep corrections, mirroring the 46%-60% drops seen in prior bear markets, as the Analytics Insight article noted. As Ethereum's 2025 cycle nears its end, the bear market trap is tightening-and for those unprepared, the consequences could be severe.