Ethereum (ETH) has faced a challenging February, with prices stagnating and struggling to gain momentum. The recent market downturn, sparked by concerns over Donald Trump’s trade policies, has dragged ETH to multi-month lows.
As bearish sentiment grows and ETH continues to struggle, investors are left wondering whether March will bring further declines or a potential comeback.
ETH Faces Turbulence as Supply Increases and Selling Pressures Grow
The consistent rise in ETH’s circulating supply is ringing alarm bells for market participants in March. In the last 30 days alone, 66,350 ETH coins worth over $138 million at current market rates have been added to the altcoin's circulating supply.
With more ETH entering circulation, the available supply for buying expands. If demand doesn't match this upsurge, the increase in supply can push the coin's price downwards as more tokens hit the market for sale.
In the absence of strong buying interest to offset the surplus supply, signs point to ETH potentially enduring a period of weakness in March.
Furthermore, the escalating balance of ETH on exchanges raises concerns. After hitting a year-to-date low of 17.27 million ETH on February 21, the exchange balance has since surged. Presently, 17.67 million ETH coins are housed in exchange wallets, rising by 2% in the last week.
The exchange balance tracks the number of coins held in exchange addresses. A spike in this balance signals a significant movement of ETH onto exchanges, often indicating that holders are gearing up to sell.
This rise in sell-side liquidity adds pressure to the coin’s price, especially with selling activities outweighing buying demand. If this trend persists in the days ahead, it could heighten bearish sentiments as more traders choose to offload rather than accumulate, intensifying the price drop.
Is it Time to Buy?
Even amidst ETH's current struggles, some analysts see this as a potential opportunity for investors eyeing gains in March. Speaking with BeInCrypto, Santiment analyst Brian Quinlivan suggested that ETH’s current price levels might be an attractive entry point for long-term investors.
Quinlivan noted that both short-term and long-term ETH holders are experiencing losses, which is a rarity among the top 50 cryptocurrencies. Historically, periods of such market capitulation have often preceded significant price rebounds, driven by accumulation from large investors following intense selling activities.
Quinlivan highlighted, “The asset (ETH) has the potential to outperform in 2025, considering its lackluster performance in 2023 and 2024 compared to other top caps and altcoins. The current negative positions of both short-term and long-term holders of Ethereum make this a relatively low-risk period to increase your position. It's not the case for most tokens in the top 50, so adding to your holdings now could be favorable compared to average moments in ETH’s history.”