• Ethereum’s market cap has plunged 36% in seven weeks, pushing tokens in profit to a multi-month low.
• Market sentiment is at rock bottom, with major traders questioning the widespread pessimism.
• Ethereum’s price reaction to the $2,500 level could determine its next major move, with targets from $1,700 to $6,000.

Ethereum has seen a dramatic 36% decline in market cap over the past seven weeks, leading to a sharp drop in the number of tokens in profit. Data from Santiment shows that the percentage of ETH in profit is at its lowest in over four months, while the number of coins in a profitable position has not been this low in over three months.

This sharp downturn has triggered significant selling pressure among retail traders, who appear to be capitulating in the face of continued underperformance. Compared to other large-cap cryptocurrencies, Ethereum has struggled to keep up, further fueling negative sentiment.

However, history has shown that periods of extreme fear often precede strong rebounds. If crypto markets stabilize, Ethereum could see surprise bounces as bearish traders exit their positions.

Even with Bitcoin hovering around $97,000, Ethereum at $2,700, and Solana at $200, the market has an uncanny silence to it, noted top trader Legendary. Comparing the situation to previous crashes like the Terra collapse, COVID-19 crash, and FTX collapse, Legendary was surprised that traders were not as excited.

The trader recalled when, in the aftermath of the FTX debacle, everyone desperately wanted to buy Solana at $10, an investment that has seen a 20x value return. But in contrast to expectation, the marketplace is a “graveyard” with even large accounts appearing to cave in.

The trader postulated that a tariff war could have triggered a mass liquidation, and such an event could have ruined many investors, explaining the anomalous lack of bullishness in the face of strong price levels.

With Ethereum still struggling to find momentum, investors are keeping a close eye on the $2,500 mark. Ethereum might have a go at $4,000, even $6,000, says one crypto trader, Ali, if it is able to hold above that important level of support. Otherwise, failure to break out could spell even further loss, with $1,700 marking its next major target for a decline.

With market confidence in limbo, Ethereum’s move will make a significant impact. A strong bounce will rekindle bullish momentum, and a break below support will trigger a new spate of selling. As investors sit and wait for the big move, everyone’s eyes will be glued to Ethereum’s price actions in the days to follow.

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