ETH may have already bottomed out!

Due to the existence of approximately 320,000 ETH in liquidation scale within the 1760-1660 range, short sellers have initiated a hunting action against large stakers, attempting to arbitrage by activating the spiral liquidation process. Whenever the coin price falls to the liquidation price, two whales with staking volumes of 64,800 ETH and 60,800 ETH always manage to add margin in a timely manner at critical moments, avoiding liquidity shocks. This has caused the coin price to get caught in a fierce battle at 1780.

Since March 24, although the ETH price has continued to decline, the open interest of bearish options in the entire network has increased by 23%. Short sellers have not only failed to take profits but have further increased their positions. In the last bear market, ETH fell from $4860 to $882, with a maximum drop of 80%. Based on this ratio, the theoretical bottom of the current ETH bear market should be $820. This is also the reason many trend-following bears believe the current decline is still far from being complete.

So, will ETH really drop to $820? The author believes it is unlikely, mainly for the following two reasons:

1. According to data from IntoTheBlock and Glassnode, although Ethereum fell 78% from its peak on June 13, 2022, more than half of the addresses were still in profit at that time, with long-term holders (investors holding for more than a year) having a profit ratio as high as 64%. Although the ETH price on March 11, 2025, is 103% higher than on June 13, 2022, the proportion of profitable addresses at this time is only 47%, and the profit ratio of long-term holders is only 34%. This abnormal divergence indicates that after sufficient turnover during the 2020-2024 cycle, the average holding cost of the ETH market has significantly risen to $2058 (Glassnode, March 2025), and most investors are currently in a state of unrealized losses, with the reluctance to sell reinforcing the diminishing selling pressure.

2. The Federal Reserve implemented unconventional monetary tightening policies from 2022 to 2023, rapidly raising the benchmark interest rate from 0% to 5.25% within just 12 months, leading to a severe contraction of global liquidity. This is the reason for the rapid collapse of the crypto market. However, the trend of marginal improvement in liquidity in 2025 has gradually become clear: on one hand, the Federal Reserve has begun planning to reduce the scale of quantitative tightening (with the earliest implementation in April); on the other hand, CME interest rate futures indicate that the market generally expects 2-3 rate cuts to be initiated in 2025, and the decline in actual interest rates is expected to promote the valuation recovery of risk assets.