Ethereum (ETH) has spent most of February trading within a narrow price range, struggling to gain momentum. However, the broader market decline this week, caused by Donald Trump's trade policies, has pushed ETH to its lowest level in months.

With increasing negative sentiment and ETH struggling to recover, investors are wondering whether March will bring further declines or a potential recovery.

ETH struggles as supply increases and selling pressure mounts

The steady increase in the circulating supply of ETH is a concerning factor for market participants in March. According to Ultra Sound Money, 66,350 ETH coins, worth over $138 million at the current market price, have been added to the altcoin's circulating supply in the past 30 days.

As more ETH tokens are put into circulation, the total available supply for purchase increases. If demand does not keep up, this increase in supply could put downward price pressure on the coin as more tokens are available for sale.

With a lack of strong buying interest to absorb the surplus supply, this trend suggests ETH may face prolonged weakness throughout March.

Furthermore, the ETH balance on exchanges is also a concerning factor. After dropping to a yearly low of 17.27 million ETH on 21/02, it has surged. At the time of writing, 17.67 million ETH coins are being held on exchange wallets, an increase of 2% in the past seven days.

The ETH balance on exchanges tracks the amount of coins held in exchange addresses. When this balance spikes, a large amount of ETH is being transferred to exchanges, often signaling that holders are preparing to sell.

This increase in selling liquidation has added downward price pressure on the coin, especially as selling activity continues to outpace buying demand. If this continues in the coming days, it will further exacerbate the negative sentiment, as more traders will seek to dump rather than accumulate, worsening the price decline.

Buying opportunity?

Despite ETH's performance, some analysts believe this could be a buying opportunity for those looking to profit in March. In an interview with BeInCrypto, Santiment analyst Brian Quinlivan said the current price level of ETH could be an attractive entry point for long-term investors.

According to Quinlivan, both short-term and long-term ETH holders are heavily underwater, a rare occurrence among the top 50 cryptocurrencies. History shows that such capitulation periods often precede significant price recoveries, as accumulation by large investors typically follows strong sell-offs.

"The asset (ETH) could be one of the better performers in 2025 due to its unimpressive performance in 2023 and 2024 relative to other alts and top caps. Both short-term and long-term Ethereum holders are in negative territory, which is not the case for most tokens in the top 50. So adding to your position is being done at a lower-risk time compared to the average history of ETH," Quinlivan noted.