The cryptocurrency market faced a sobering reality on February 20, 2025, as Ethereum (ETH) reported a negative 365-day rolling return — a rare and concerning signal for investors and traders alike. Financial analyst Miles Deutscher highlighted this downturn, noting that ETH’s annual return has dipped below 1x, effectively marking a loss compared to its price one year ago. This shift not only reflects current market weakness but also raises questions about Ethereum’s momentum in the broader digital asset landscape.
At approximately 10:00 AM EST, ETH was trading at $2,150, down 5% from the previous day. Despite being one of the most resilient assets in the crypto ecosystem, Ethereum is now grappling with declining investor sentiment, reduced on-chain activity, and growing volatility. Over the past 24 hours, trading volume surged to $12.5 billion, signaling increased market participation amid uncertainty (CoinGecko, 2025). Meanwhile, the ETH/BTC pair dropped from 0.052 BTC to 0.05 BTC, indicating weakening relative strength against Bitcoin.
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Declining On-Chain Activity Signals Bearish Momentum
On-chain metrics further underscore the cooling interest in Ethereum. Data from Etherscan shows that active addresses fell by 10% over the past 24 hours, settling at 450,000. Transaction count followed a similar trend, dropping 15% to 750,000 transactions. These figures suggest reduced user engagement — often a precursor to prolonged bearish pressure.
Lower network utilization can indicate waning confidence among retail and institutional participants. With fewer users interacting with decentralized applications (dApps), staking platforms, or DeFi protocols, the economic throughput of the Ethereum ecosystem contracts. This contraction may delay recovery even if macro conditions improve.
That said, Ethereum’s foundational strength remains intact. The network continues to lead in smart contract innovation, layer-2 scaling adoption, and institutional integration — all key drivers for long-term value accrual.
Volatility Spikes Amid Investor Reassessment
Market volatility has intensified in response to the negative return signal. Between 11:00 AM and 1:00 PM EST on February 20, ETH/USD fluctuated between $2,100 and $2,200 within just two hours (TradingView, 2025). This heightened price action triggered a surge in derivatives activity.
Options trading volume spiked to $1.5 billion over 24 hours — a 20% increase from the prior day — with put options dominating as traders hedge against further downside (Deribit, 2025). The ETH/BTC pair also saw notable movement, sliding from 0.05 BTC to 0.048 BTC during midday trading on Kraken. Such shifts reflect active portfolio rebalancing and risk management amid deteriorating sentiment.
Stablecoin-denominated pairs remain highly liquid. Binance alone recorded $4.2 billion in ETH/USDT trading volume over the past day, underscoring continued market depth and accessibility for traders seeking entry or exit points.
Technical Indicators Suggest Potential for Reversal
Despite the bearish short-term outlook, technical analysis reveals signs of potential stabilization. At noon EST on February 20, Ethereum’s Relative Strength Index (RSI) hit 35 — well within oversold territory. Historically, such levels have preceded corrective rallies, especially when supported by strong fundamentals.
The Moving Average Convergence Divergence (MACD) tells a more cautious story: a bearish crossover has formed, with the MACD line dipping below the signal line (Coinigy, 2025). This pattern typically signals ongoing downward momentum and could discourage early buying.
However, Bollinger Bands have expanded significantly, with the upper band at $2,300 and the lower band at $2,000 (TradingView, 2025). This widening indicates rising volatility — often a precursor to major price moves. If positive catalysts emerge, such as regulatory clarity or strong on-chain upgrades, a breakout toward the upper band is possible.
With combined trading volume across major exchanges like Coinbase ($3.8 billion) and Binance ($4.2 billion), there's no shortage of market interest — only uncertainty about direction.
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Impact on AI-Related Cryptocurrencies
While no major AI-specific news emerged on February 20, 2025, the ripple effects of Ethereum’s performance were felt across correlated sectors — particularly AI-driven tokens like SingularityNET (AGIX) and Fetch.ai (FET).
AGIX traded at $0.35 — down 3% — while FET declined by 2% to $0.50 (CoinMarketCap, 2025). Both tokens maintain strong correlation with ETH: AGIX shows a 24-hour correlation coefficient of 0.75, and FET stands at 0.70 (CryptoWatch, 2025). This high interdependence means that when Ethereum weakens, AI tokens often follow suit due to shared investor bases and market narratives.
Nonetheless, AI-focused blockchain projects continue to attract developer interest and strategic partnerships. Daily trading volume in AI-related crypto assets remained steady at around $500 million (Kaiko, 2025), suggesting underlying demand despite short-term headwinds.
For traders, this environment presents opportunities to capitalize on volatility through pairs trading or sector rotation strategies — moving capital temporarily into less correlated assets during ETH downturns.
Frequently Asked Questions
Q: What does a negative 365-day rolling return mean for Ethereum investors?
A: It means that anyone who bought ETH exactly one year ago is currently holding an unrealized loss. While short-term fluctuations are normal, sustained negative returns may prompt portfolio reassessment.
Q: Is Ethereum fundamentally weakened by this downturn?
A: Not necessarily. Short-term price movements don’t override long-term strengths like network security, developer activity, and ecosystem growth. Market cycles are part of crypto’s maturation process.
Q: Can oversold indicators predict a rebound?
A: An RSI below 35 suggests oversold conditions, which can precede a bounce — but it’s not guaranteed. Traders should combine RSI with volume trends and on-chain data for better accuracy.
Q: Why are AI tokens affected by ETH’s performance?
A: Many AI cryptos are built on Ethereum or ERC-20 compatible chains. They also share investor sentiment and funding flows with the broader altcoin market, making them sensitive to ETH movements.
Q: Should I sell ETH during this dip?
A: That depends on your investment horizon and risk tolerance. Long-term holders may view dips as accumulation opportunities, while active traders might use derivatives to hedge exposure.
Q: Where can I track real-time ETH metrics like RSI and on-chain activity?
A: Platforms like TradingView, Etherscan, and CoinGecko offer live data dashboards. For advanced analytics and trading tools, integrated solutions provide deeper insights.
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