Ethereum's Capitulation Spark: $5,000 in Sight by February 2025

Ethereum's price has been consolidating over the past few weeks, and its performance in 2024 and 2025 has been lackluster, leading investors to lose hope. However, analysts believe that Ethereum (ETH) could be poised for a significant rally, potentially reaching $5,000 in February 2025.

Ethereum's performance in 2024 was disappointing, with Bitcoin (BTC) up 8% while ETH price today is around -1.4%. However, recent month-end volatility has caused a massive capitulation, which could signal a trend reversal.

On January 31, Ethereum price rose 5.87% but closed the day at a 1.65% gain. This sudden uptick and reversal triggered a massive capitulation, with 601 million ETH exchanged at a loss, according to Santiment data. Historically, such capitulations have been bottom signals, often followed by double-digit uptrends. For instance, on August 5, 2024, Ethereum price shot up 29% in the next three days after a capitulation signal.

The Market Value to Realized Value (MVRV) Ratio confirms that the capitulation could be from short-term holders. The 30-day, 60-day, and 90-day MVRV sit at 0.62%, -3.88%, and -2.36%, respectively, while the 180-day MVRV hovers around 6.32%. With many short-term holders sitting at a loss, the probability of Ethereum price triggering a reversal is high.

There are multiple signs suggesting Ethereum price could hit $5,000 in February 2025. Historical returns indicate that post-halving years support altcoin rallies. Additionally, the daily chart shows Ethereum price hovering inside a falling wedge setup, forecasting a price target of $4,000 after a 17% rally. Once the $4,000 psychological level is cleared, ETH will attempt a revisit to its all-time high (ATH) at $4,877, hinting at a retest of the $5,000 psychological level.