Citibank's latest report pointed out that Ethereum (ETH) price has fallen by more than 20% this year, but its fundamentals are improving. Total value lock-in (TVL) on the Ethereum network has risen sharply, while Ethereum ETFs are still attracting capital inflows, with cumulative inflows of US$3.2 billion since its launch in July. In addition, the popularity of related searches is also increasing.

Although user activity has fluctuated significantly recently, Citi analysts say Ethereum's fundamentals are not completely pessimistic. The report also mentioned that former U.S. President Trump's World Liberty Financial holds more than $200 million in Ether, which may be seen as an additional impetus for the U.S. to strengthen support for the crypto industry. At the same time, the weak performance of Ethereum is consistent with the rise in Bitcoin dominance, which has now risen to a multi-year high, exceeding 60%.

Matrixport report pointed out that Ethereum's relative strength index (RSI) has fallen to Historical lows, close to the extreme oversold range, which may provide conditions for the rebound in ETH prices. In addition, Ethereum's highly-watched Pectra upgrade plan will be launched in March 2025. This upgrade integrates the original Prague and Electra versions, which are expected to significantly improve the scalability, efficiency and user experience of the network.

The report also mentioned that before the upgrade is officially launched in March, the market may issue multiple test network announcements, which may further boost market sentiment. Although Ethereum's historical upgrade events are often accompanied by the "sell news" market, the current oversold market background may create opportunities for the rebound of ETH prices.

Paradigm is also actively bullish, believing that Ethereum has always been the pioneer in the crypto field. Ethereum paves 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 proof (ZK) and maximum extractable value (MEV). Ethereum’s researchers and engineer community has built a solid foundation for the next generation of decentralized applications.

HashKey Jeffrey believes that Ethereum was once the core promoter of the DeFi and NFT wave. However, after the market hotspots turned to AI, RWA (real world assets) and Memecoin in recent years, their dominance has been challenged. For example, many AI projects and Mem of Solana ecosystemEcoin did not choose Ethereum as its main platform, resulting in its gradual marginalization in emerging narratives.

In addition, unlike the influx of funds when Bitcoin ETFs were launched, ETH ETFs were listed Afterwards, capital outflows occurred, partly due to the selling pressure of old Grayscale products.

Paraconianly, however, the long-term interest of institutions in ETH is still heating up. Bernstein analysts predict that ETH may become the "institutional darling" in 2025 due to mechanisms such as pledge income (28% ETH is pledged), smart contract locking (7.5%) and ETF absorption (3%). This misalignment between short-term and long-term expectations highlights the market's confusion about ETH value capture capabilities.

Different view

Web3 accelerator and founder community Alliance DAO two joint creations Imran Khan and Qiao Wang share their respective opinions on the podcast on the theme of On Consumer Crypto:

Imran believes that "the current market supporters of Base have turned to Solana". Qiao responded to this view: "Solana is easier to attract users, and for developers familiar with EVM, it is not easy to turn to Solana. A whole new set of tools is needed to learn, but even so, they still feel it is worth it because Solana provides a better user base and ecological support. ”

Qiao also said: "I actually have held Ethereum since the Creation Block. But I sold it last year, and I held it for a full 10 years. You can imagine, holding an asset for 10 years, and then suddenly, Its growth potential is almost over. ”

JPMorgan pointed out in its latest report that Ethereum (ETH) has not performed as much as Bitcoin (BTC) recently ) and other competitive chains are mainly due to their lack of market appeal similar to Bitcoin's "digital gold" narrative, and are also facing fierce competition from blockchains such as Solana.

In addition, Ethereum (ETH) short positions surged 500% since November 2024 and rose 40% in the past week, a record high, showing Wall Street institutions' extreme bearish sentiment towards ETH, despite Bitcoin hit new highs again and ETH is still about 45% lower than its historical high in 2021, forming a huge gap. After Trump took office, the SEC's regulatory risks on the securities attributes of ETH were reduced, and Eric Trump even publicly called for ETH, but market sentiment Still sluggish.

The current market discussions about the reasons why ETH is shorted by institutions on a large scale may involve market manipulation, institutional hedging strategies or bearish expectations for the development prospects of ETH. With the extreme accumulation of short positions, the market began to pay attention to whether ETH may experience a short squeeze (Short Squeeze), triggering a strong rebound.

Although Ether (ETH) prices have fallen recently, but Ethereum’s fundamentals are improving. Total value lock-in (TVL) is rising, and Ethereum ETFs have attracted a large amount of capital inflows. Despite volatility in user activity and market competition pressure, Ethereum is in smart contracts , Decentralized Finance (DeFi) and other fields are still pioneering forces.

In the future, Ethereum will significantly improve the network in the Pectra upgrade launched in March 2025. Scalability, efficiency and user experience. Institutional long-term interest in ETH is also heating up, and its pledge income, smart contract locking and ETF absorption mechanisms are expected to make it an “institutional darling”. Through continuous innovation and ecosystem optimization, Ether The fang is expected to usher in a glorious moment again!