Ethereum's Capitulation Spark: $5,000 in Sight by February 2025
AInvestSaturday, Feb 1, 2025 1:17 am ET
1min read

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.

Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.