Ethereum is currently at a decisive moment, sitting at a major support level that has historically played a crucial role in determining the market’s direction. The parallels to 2021 are striking. Back then, ETH experienced a deep correction of over 60 percent after reaching its cycle high. However, once it found support in a key liquidity zone, it staged an explosive rally, gaining over 175 percent in just a few months. Now, in 2025, we are seeing an almost identical setup. ETH has once again corrected significantly from its recent highs, dropping nearly 58 percent, and is now testing the same kind of structural support that previously acted as a springboard for a new bull run.
The technicals indicate that this support level is not just any ordinary price zone. It coincides with the 200-week exponential moving average, a historically strong dynamic support level that has often marked the bottom of major corrections. Additionally, this region aligns with a previously established demand zone that saw significant buying interest in the past. The fact that ETH is testing this support right before a major macroeconomic event makes this moment even more critical. On March 19, the Federal Reserve is set to announce its latest interest rate decision, which could have a direct impact on liquidity conditions across all markets, including crypto.
If Ethereum manages to hold this level and bounce, the upside potential could be significant. The first major resistance to overcome would be around 3929, a level that previously acted as a rejection zone during the last cycle. A breakout above that level could open the door for a move towards 4875, which represents a key structural resistance and would put ETH back in a strong bullish trend. A repeat of the 2021 pattern could mean that ETH is on the verge of another parabolic move.
However, the bearish scenario cannot be ignored. If this support fails and ETH breaks below this critical zone, it would be a major warning sign. A breakdown could trigger further downside pressure, potentially leading to a deeper correction and confirming a bearish trend. This could mean that Ethereum enters an extended bear market, with the next significant support levels much lower. The rejection at resistance, followed by a lower high, would suggest that sellers remain in control, and without strong bullish catalysts, a further decline would be the path of least resistance.
Beyond technicals, fundamentals are playing an equally important role. The crypto market has been increasingly correlated with traditional finance, and with the Federal Reserve’s decision just days away, investors are watching closely. If the Fed signals continued monetary tightening or delays interest rate cuts, risk assets like Ethereum could face further downside. On the other hand, a more dovish stance from the Fed could inject fresh liquidity into the market, acting as a catalyst for ETH to reclaim higher levels.
Sentiment in the crypto space is also crucial. On-chain data suggests that long-term holders are still accumulating, which indicates confidence in Ethereum’s long-term value. However, short-term traders remain cautious due to the uncertain macro environment. Open interest in ETH futures has seen a decline, suggesting that many traders are waiting for confirmation before making big moves. This means that volatility could spike significantly once a clear direction is established.
Overall, Ethereum is at a critical juncture. The historical comparison to 2021 suggests that this could be the start of a major recovery, but whether or not history repeats itself depends largely on external factors like the Federal Reserve’s decision and broader market sentiment. If this support holds, ETH could be at the beginning of another strong bull cycle. If it fails, the bearish alternative could become the dominant narrative. The next few days will be crucial in determining which path Ethereum takes.
The technicals indicate that this support level is not just any ordinary price zone. It coincides with the 200-week exponential moving average, a historically strong dynamic support level that has often marked the bottom of major corrections. Additionally, this region aligns with a previously established demand zone that saw significant buying interest in the past. The fact that ETH is testing this support right before a major macroeconomic event makes this moment even more critical. On March 19, the Federal Reserve is set to announce its latest interest rate decision, which could have a direct impact on liquidity conditions across all markets, including crypto.
If Ethereum manages to hold this level and bounce, the upside potential could be significant. The first major resistance to overcome would be around 3929, a level that previously acted as a rejection zone during the last cycle. A breakout above that level could open the door for a move towards 4875, which represents a key structural resistance and would put ETH back in a strong bullish trend. A repeat of the 2021 pattern could mean that ETH is on the verge of another parabolic move.
However, the bearish scenario cannot be ignored. If this support fails and ETH breaks below this critical zone, it would be a major warning sign. A breakdown could trigger further downside pressure, potentially leading to a deeper correction and confirming a bearish trend. This could mean that Ethereum enters an extended bear market, with the next significant support levels much lower. The rejection at resistance, followed by a lower high, would suggest that sellers remain in control, and without strong bullish catalysts, a further decline would be the path of least resistance.
Beyond technicals, fundamentals are playing an equally important role. The crypto market has been increasingly correlated with traditional finance, and with the Federal Reserve’s decision just days away, investors are watching closely. If the Fed signals continued monetary tightening or delays interest rate cuts, risk assets like Ethereum could face further downside. On the other hand, a more dovish stance from the Fed could inject fresh liquidity into the market, acting as a catalyst for ETH to reclaim higher levels.
Sentiment in the crypto space is also crucial. On-chain data suggests that long-term holders are still accumulating, which indicates confidence in Ethereum’s long-term value. However, short-term traders remain cautious due to the uncertain macro environment. Open interest in ETH futures has seen a decline, suggesting that many traders are waiting for confirmation before making big moves. This means that volatility could spike significantly once a clear direction is established.
Overall, Ethereum is at a critical juncture. The historical comparison to 2021 suggests that this could be the start of a major recovery, but whether or not history repeats itself depends largely on external factors like the Federal Reserve’s decision and broader market sentiment. If this support holds, ETH could be at the beginning of another strong bull cycle. If it fails, the bearish alternative could become the dominant narrative. The next few days will be crucial in determining which path Ethereum takes.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.