Ethereum [ETH] is showing signs of recovery after weeks of bearish pressure, posting a strong 8.27% daily gain that reversed nearly 21% of its recent losses. This bounce, which emerged following a sharp sell-off, has ignited fresh optimism among traders. Many now wonder if this marks the beginning of a broader recovery, potentially setting the stage for Ethereum to reclaim the $3,000 level in the third quarter of 2025. However, the road ahead is far from clear, as ETH now confronts a critical resistance zone between $2,400 and $2,600—a supply wall that could either stall the rally or act as a springboard for further gains.
Over the past two weeks, Ethereum has underperformed Bitcoin [BTC], with ETH declining 26% from its mid-June peak of $2,878. In contrast, BTC saw a smaller 10.89% dip during the same period. This divergence in performance has been attributed to weakness among Ethereum’s short-term holders (STHs). As ETH dropped below the $2,500 level, STH Net Unrealized Profit/Loss (NUPL) data showed a clear move into the capitulation zone, reflecting a broader loss of confidence. Realized losses surged, and panic selling took over, suggesting that many STHs were offloading their positions under pressure.
Now that ETH is once again approaching the $2,500 level, a familiar and densely populated cost basis zone, traders are watching closely. Glassnode’s cost basis heatmap reveals a heavy concentration of buying in the $2,400 to $2,600 range, indicating that many addresses opened their positions within this price band. The yellow and orange bands on the heatmap confirm this clustering, which could turn this zone into a battleground between sellers looking to break even and buyers hoping for a sustained breakout.
A critical test is now unfolding. If ETH can push through this supply zone with convincing volume and momentum, it could trigger a wave of bullish sentiment and open the door for a move toward the $3,000 mark. However, if selling pressure mounts, particularly from those looking to exit at breakeven after weeks of losses, ETH could face a swift rejection and re-enter bearish territory. The market is caught in a delicate balance between conviction and caution, and how it resolves may shape Ethereum’s trajectory for the rest of Q3.
Adding to the mixed signals is BlackRock’s recent decision to offload $18.4 million worth of Ethereum. While the firm has been a notable institutional participant in crypto, this sell-off introduces a cautious tone into the market narrative. It’s unclear whether this move was a routine portfolio adjustment or a strategic reduction in risk exposure, but its timing, just as ETH approached resistance, is noteworthy. On the other hand, positive ETF flows have brought in over $100 million in recent weeks, suggesting that institutional interest hasn’t dried up entirely.
Meanwhile, derivatives markets are flashing bullish signals. Ethereum open interest has risen by 9.3%, and Binance perpetual futures show a 61% long bias. This indicates that speculative sentiment remains skewed toward the upside. However, such positioning also raises the risk of a long squeeze if ETH fails to break higher. If the price stalls or retreats from current levels, leveraged long positions could be forced to unwind, adding downward pressure in the short term.
Ultimately, Ethereum’s performance over the coming days will be crucial. The $2,400 to $2,600 zone will likely serve as a litmus test for market sentiment. A strong break above could turn this resistance into support, giving ETH the momentum needed to test and potentially breach the $3,000 psychological level. Conversely, failure to sustain above this zone could trigger another wave of selling and delay hopes of a Q3 breakout.
As always, traders should remain cautious and consider both technical and macroeconomic factors when evaluating Ethereum’s next move. The balance between renewed conviction and lurking caution continues to define the market environment.
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