While the market is still debating whether Ethereum can stabilize at $3000, those investors who hesitated in the $1500-$1800 range have already been left behind by the trend. 'The biases in one's heart are an insurmountable mountain' - this phrase reveals the cognitive dilemma of countless traders. The market turning point in April 2025 is not a coincidence; after two years of washout, the technical aspects and market structure of Ethereum have undergone a qualitative change, while those who still view the situation with old thinking are repeating the vicious cycle of 'missing the low point - chasing high and getting trapped.'
I. Cognitive cage: How biases cause investors to miss out on thousand-point rallies.
The Ethereum market from 2023 to early 2025 is playing out a classic cognitive game. When the price fluctuates between $1500 and $1800, the bearish voices mainly come from three cognitive traps:
Anchoring effect traps investors in historical prices:
The memory of Ethereum plummeting from $4800 to $880 in 2022 has led many to believe that $1800 is the 'rebound high'.
A prominent financial influencer stated in March 2025 that 'Ethereum at $1800 has peaked', reasoning that 'there is still a 60% gap from the historical high'.
Exchange data shows that the selling volume of retail investors in the $1800 range was 2.3 times the buying volume, with a large amount of chips being sold off in the bottom area.
Loss aversion psychology leads to fear of bottom-fishing:
After the LUNA crash event in May 2024, investors instinctively feared 'seemingly cheap' assets.
A survey in a certain community showed that 68% of investors were 'worried about further declines' when Ethereum was at $1500, and only 12% dared to increase their positions.
This psychology causes many to cut losses and leave during the crash on April 7, only to watch prices rebound by 50% afterwards.
Linear thinking pitfalls hinder trend judgment:
Traditional technical analysis believes 'the longer the horizontal, the higher the vertical', but ignores changes in market structure.
A certain brokerage report insists that 'there is strong resistance above $2000 for Ethereum', yet it fails to consider that institutional holding ratio has risen from 15% to 32%.
Linear thinking prevents investors from understanding: The longer the washout lasts, the stronger the trend after the breakout tends to be.
II. Technical revolution: How bullish signals at the weekly level are formed.
Since April 2025, the technical aspects of Ethereum have undergone a historic reversal, and these signals are enough to overturn traditional perceptions.
MACD's cross-cycle resonance:
The weekly MACD formed a golden cross in March 2025, with the histogram turning from green to red for 8 consecutive weeks.
The monthly MACD closely follows the golden cross, forming a 'weekly-monthly resonance' bullish pattern, which has only occurred 3 times in history (2016, 2020, 2023).
Technical indicators show that the average increase after a MACD golden cross is 217%, lasting for 6-12 months.
Bollinger Band contraction and breakout:
From November 2024 to March 2025, the Bollinger Band width shrunk to 0.8, the lowest since 2020.
After the price broke above the upper band ($1820) in April, the Bollinger Bands expanded, forming a 'trumpet mouth' bullish pattern.
Historical backtesting shows that after this pattern appears, prices often continue to rise along the upper band, with a deviation rate of up to 30%.
Confirmation of trend with naked K pattern:
The crash on April 7 formed a 'single needle bottom' pattern, with a lower shadow length of 15%, confirming support at $1580.
Subsequently, there were 5 consecutive weeks of gains, forming an upgraded 'red three soldiers' pattern, with weekly closing prices continually setting new highs.
Volume synchronously expands, with trading volume increasing by 170% during breakouts compared to the consolidation period, confirming trend validity.
Bullish arrangement of the moving average system:
The 5-week moving average, 10-week moving average, and 20-week moving average each crossed above the 60-week moving average.
The distance between moving averages is gradually expanding, forming a 'bullish moving average arrangement', the first occurrence since the bull market in 2021.
The moving average system provides stepwise support for prices, creating buying opportunities every time it pulls back to the 10-week moving average (currently $2250).
III. Underlying logic of trend reversal: Market reconstruction after the washout.
The trend reversal of Ethereum is not coincidental, but an inevitable result of the fundamental change in market structure.
Continuous inflow of institutional funds:
From Q4 2024 to Q1 2025, institutional holdings of Ethereum grew by 210%, with giants like BlackRock and Fidelity increasing their holdings by over 3 million ETH.
Grayscale's GBTC Ethereum holdings increased from 18% to 35%, with locked positions reaching 2.4 million ETH, accounting for 3.8% of circulating supply.
Exchange data shows that the average holding period of institutional accounts has extended from 67 days to 182 days, significantly enhancing market stability.
Comprehensive upgrade of ecological fundamentals:
After Layer 3 expansion was completed, Ethereum's network TPS increased from 20 to 100,000, and Gas fees dropped by 85%, leading to a qualitative change in DeFi application experience.
Tokenization of real assets (RWA) accelerates, with real estate tokens issued by institutions like JPMorgan and Goldman Sachs surpassing $5 billion in locked positions.
The NFT market is shifting from 'image speculation' to practical use, with blue-chip projects like BAYC integrating offline rights, returning ecological value.
Marginal improvement in the regulatory environment:
The U.S. SEC's regulatory classification of Ethereum has shifted from 'commodity' to 'compliant asset', increasing expectations for the approval of ETH spot ETFs.
The EU (Crypto Asset Market Regulation) clearly states that ETH staking is tax-exempt, stimulating 5 million ETH to enter the staking pool.
Hong Kong launched the 'Crypto Entrepreneur Visa' to attract Ethereum projects, accelerating ecological compliance.
Fundamental changes in liquidity patterns:
Exchanges show that Ethereum's supply dropped from 8 million in 2024 to 5.8 million in 2025, exacerbating the scarcity of spot supply.
The number of whale addresses (holding over 10,000 ETH) has increased by 47%, with 32 new addresses coming from traditional financial institutions.
The proportion of stablecoin trading pairs with Ethereum increased from 35% to 52%, optimizing the structure of fund inflows.
IV. Practical insights: How to achieve cognitive upgrades during trend reversals.
In the face of trend opportunities for Ethereum, investors need to establish a completely new cognitive framework:
Three major actions to break old thinking:
Delete historical K-line memories: Clear the psychological shadow of the 2022 crash and reassess value with the 'current market structure'.
Stay away from bearish noise: Unfollow those who are continuously bearish, and focus on on-chain data rather than emotional rhetoric.
Reconstruct valuation models: Shift from 'speculative trading' thinking to 'ecological value' assessment, focusing on fundamentals like TVL and user counts.
Core strategy of trend trading:
Moving average following strategy: Use the 10-week moving average as a lifeline, holding positions as long as the price stays above it.
Buy on pullback method: Increase positions whenever there is a pullback within 10% of previous lows, such as when $2800 pulls back to the $2520-$2800 range.
Target ladder method: Set profit-taking levels at $3000, $3500, and $4000, and cash out profits in batches.
Upgraded cognition of risk control:
Volatility hedging: When the price breaks through $3000, buying put options to hedge against the risk of a pullback.
Rebalancing of funds: Every 20% increase, transfer 20% of profits to stablecoins to reduce position risk.
Emotional circuit breaker mechanism: Mandatory breaks when daily profits exceed 15%, to avoid excessive confidence leading to distorted actions.
The breakthrough path of circle reconstruction:
Join professional communities: Choose communities centered around on-chain data, and stay away from 'pump groups'.
Build a cognitive network: Communicate with programmers, analysts, and compliance experts to form a multidimensional understanding.
Practice leads to true knowledge: Test trend strategies with 1% of capital, iterating cognition in actual combat.
V. Conclusion: Complete cognitive iteration in trend reversal.
The rise of Ethereum from $1500 to $2800 is essentially a process of cognitive realization. Those who bottomed out during the crash on April 7 but left after a 10% profit did not lack technical analysis ability, but were trapped in the old cognitive cage. When the market structure has undergone a qualitative change and the technicals provide clear signals, the only way to break through is to overcome biases and embrace change.
In the Ethereum market of 2025, $4000 is not the endpoint but the starting point of a new trend. For investors, it's not about predicting the peak but establishing a cognitive system that can adapt to trend changes - this requires us to remain rational during greed, dare to enter during fear, and continue learning during confusion. After all, in the rapidly evolving cryptocurrency market, the only constant is change itself.
Of course, in my view, no matter how much you are losing now, there are always opportunities in the market.
As long as you follow the right people, do the right things, and choose the right path, six months is enough to prove everything.
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