Citibank's latest report pointed out that the price of Ethereum (ETH) has fallen by more than 20% this year, but its fundamentals are improving. The total value locked (TVL) on the Ethereum network has risen sharply, while the Ethereum ETF continues to attract capital inflows, with cumulative inflows reaching $3.2 billion since its launch in July. In addition, the popularity of related searches is also increasing.
Despite recent volatility in user activity, Citi analysts said Ethereum's fundamentals are not entirely pessimistic. The report also mentioned that former U.S. President Trump’s World Liberty Financial holds more than $200 million in Ether, which could be seen as additional motivation for the U.S. to increase its support for the crypto industry. Meanwhile, Ethereum’s weak performance coincides with a rise in Bitcoin’s dominance rate, which has now risen to multi-year highs above 60%.
The Matrixport report pointed out that Ethereum's relative strength index (RSI) has fallen to a historical low, approaching the extreme oversold range, which may provide conditions for ETH prices to rebound. In addition, Ethereum’s highly anticipated Pectra upgrade is scheduled to be launched in March 2025. This upgrade integrates the originally planned Prague and Electra versions and is expected to significantly improve the network’s scalability, efficiency and user experience.
The report also mentioned that the market may release multiple testnet announcements before the upgrade is officially launched in March, which may further boost market sentiment. Although upgrade events in Ethereum’s history are often accompanied by “sell the news” market, the current oversold market background may create opportunities for ETH prices to rebound.
Paradigm is also optimistic and believes that Ethereum has always been a pioneering force in the encryption field. Ethereum paved the way for smart contracts, decentralized autonomous organizations (DAOs), and decentralized finance (DeFi), and continues to innovate on cutting-edge challenges such as zero-knowledge proofs (ZK) and maximum extractable value (MEV). Ethereum’s community of researchers and engineers has built a solid foundation for the next generation of decentralized applications.
HashKey Jeffrey believes that Ethereum was once the core driving force behind the DeFi and NFT waves. However, its dominance has been challenged in recent years as market focus has shifted to AI, RWA (real world assets) and Memecoin. For example, many AI projects and Solana’s Memecoin did not choose Ethereum as their main platform, resulting in its gradual marginalization in the emerging narrative.
In addition, unlike the influx of funds when the Bitcoin ETF was launched, the ETH ETF experienced capital outflows after its listing, partly due to the selling pressure of Grayscale's old products.
However, paradoxically, institutional long-term interest in ETH is still heating up. Bernstein analysts predict that ETH may become the "institutional darling" in 2025 due to mechanisms such as staking income (28% of ETH is staked), smart contract lock-in (7.5%) and ETF absorption (3%). This misalignment between short-term and long-term expectations highlights the market’s confusion about ETH’s ability to capture value.
Different views
Web3 accelerator and founder community Alliance DAO co-founders Imran Khan and Qiao Wang shared their respective views in a podcast titled "On Consumer Crypto":
Imran believes that "Base supporters in the current market have turned to Solana." Qiao responded to this view: "Solana is easier to attract users. For developers familiar with EVM, it is not easy to switch to Solana. They need to learn a whole new set of tools, but even so, they still feel it is worth it because Solana provides a better user base and ecological support. Qiao also stated: “I have actually held Ethereum since the genesis block. But I sold it last year, having held it for a full 10 years. You can imagine holding an asset for 10 years and suddenly feeling that its growth potential has almost reached its limit. : : : : : : : : : : : : : : : Through continuous innovation and ecosystem optimization, Ethereum is expected to usher in its glorious moment again!
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