Ethereum's Macro Indicator Suggests Early Recovery After Bearish Momentum

Ethereum’s price action has faced challenges in recent weeks, but a long-term macro indicator suggests an early recovery. A macro trend oscillator, developed by a crypto analyst known as Decode on the social media platform X, has shown signs of a turnaround after an extended period of bearish momentum. This could signal the start of a new phase of strength for the second-largest cryptocurrency by market cap.

The oscillator’s monthly chart, when overlaid with Ethereum’s price data on the monthly candlestick timeframe, reveals the depth and duration of the recent bearish momentum. The red histogram bars, which indicate macro weakness, have persisted longer than usual, reflecting the broader economic drag on the crypto market. January of this year briefly suggested a return to bullish territory, but this green print quickly faded, leading to another downturn. However, the recent red bars are notably shallower compared to those in 2023 and 2024.

This shift is more evident on lower timeframes, particularly the 3-day chart, which shows a rejection from negative territory and the formation of a small green bar before the current pullback. Decode interprets this as a possible early-stage turnaround. Historically, once the oscillator turns green in a sustained fashion, a rapid upward move in Ethereum and broader crypto prices has followed.

Decode’s oscillator also tracks the S&P 500 and broader macro trends, where green phases are not only more prolonged but also steeper and more robust. This asymmetric distribution of momentum reflects the true bias of assets toward expansion over contraction. Decode noted that this is not an arbitrary indicator but a fully integrated macroeconomic index built from 17 metrics, including equities, bonds, commodities, currency flows, central bank liquidity, and sentiment data.

Ask Aime: "Will Ethereum recover from its recent downturn? How can I identify early signs of a potential turnaround?"

Translating this into Ethereum, the gradual shift toward the green zone is seen as a signal of incoming price strength. Although Ethereum has yet to fully recover from its recent correction to $1,400, the consistent improvement in Decode’s macro trend oscillator suggests that the cryptocurrency may be entering a fresh uptrend. The focus is now on green bars printing consistently again, especially across multiple timeframes.

At the time of writing, Ethereum is trading at $1,830. The last 24 hours have been marked by a brief break below $1,800 before bouncing at $1,785. This move caused liquidations of approximately $35.92 million in ETH positions, with long positions accounting for $28.38 million of that amount.