Musk’s Secret Plans and Trump’s Crypto Ambitions: Could Ethereum’s Mysterious Comeback Be on the Horizon?

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Ethereum, the world’s second-largest cryptocurrency, finds itself in a challenging position as it struggles to break through the significant resistance level of $3,400. Currently trading at $3,260, Ether has been on a downward trend for nearly six weeks, with its value declining over 20% since it dipped below the $4,000 mark in mid-December 2024.

Analysts indicate that to regain its momentum and approach its previous highs, Ethereum must boost its blockchain activity and adoption. According to Aurelie Barthere, a principal research analyst at Nansen, Ethereum faces stiff competition from other layer-1 platforms that are catching up in terms of applications, use cases, fees, and staked amounts. Barthere suggests that increased collaboration with both private and public sectors, especially in the United States, where regulatory movements have been favorable, could be beneficial for Ethereum.


Additionally, the Department of Government Efficiency, led by Elon Musk, has reportedly shown interest in blockchain-based solutions for expense tracking and financial management, which could drive further adoption of Ethereum. There are also speculations about the Trump family exploring Ethereum for developing a cryptocurrency business, which Joseph Lubin, co-founder of Ethereum, believes could increase adoption.

Despite the challenges, Ether options trading volume has surged, signaling a recovery in the crypto market. Although this doesn’t have a direct impact on Ether’s price, the increase in options trading suggests a bullish outlook among traders, with a notable shift towards out-of-the-money call options.

Crypto trader Cas Abbé emphasized that Ether needs to achieve a 1-day close above $3,400 to continue its upward trajectory toward the $4,000 mark. Such a move would create a bullish divergence, although Ether must overcome the $3,400 resistance first, which could potentially lead to the liquidation of over $1 billion in leveraged shorts.

Market watchers remain optimistic about a possible Ether resurgence in February due to sustained institutional interest, particularly from Trump’s World Liberty Financial protocol. However, Ethereum’s journey back to its all-time high depends heavily on its ability to drive adoption and enhance blockchain activities.