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ETHEREUM - Long-Term Bullish ForecastEthereum is looking quite bullish based on my analysis, there has been a capitulation, but looking-forward, Ethereum's future looks bright. I'm expecting price to hit $20-30k for our Base Bullish Scenario, and for our Extreme Bullish Scenario, I'm expecting price to hit $77-90k. This may seem like a stretch, but with all the developments around Ethereum being the top choice for financial institutions and governments to tokenize their assets, it makes it possible. When price will get there, it's hard to say, but 2026 is possible. We'll see. Let me know what you think.
BINANCE:ETHUSDLong
by SunnyHillCapital
1
ETH Surges 20% Post-Pectra: Crypto's Ultimate Comeback?Ether Clocks 'Insane' 20% Candle Post-Pectra — A Turning Point? The cryptocurrency market witnessed a remarkable event as Ethereum (ETH) surged by an impressive 20% following the successful implementation of the Pectra hard fork. This dramatic price movement has caught the attention of traders, investors, and analysts alike, sparking intense debate about whether this represents a genuine turning point for the second-largest cryptocurrency by market capitalization or merely a temporary respite in a challenging market environment. The Pectra Catalyst The Pectra hard fork, representing one of Ethereum's most significant technical upgrades since its transition to proof-of-stake, was successfully implemented in early 2025. This upgrade introduced crucial improvements to the Ethereum network, including enhanced transaction processing efficiency, reduced gas fees, and expanded smart contract functionality. Unlike previous upgrades that sometimes resulted in "buy the rumor, sell the news" reactions, Pectra's implementation appears to have triggered substantial positive price action. The 20% candle marked Ethereum's largest single-day gain in over 18 months, propelling ETH past the crucial $1,900 resistance level that had previously acted as a ceiling for price movements. The timing of the upgrade coincided with increasing institutional interest in Ethereum, creating perfect conditions for a significant price movement. Data from on-chain analytics platforms indicates that large wallet addresses began accumulating ETH in the weeks leading up to Pectra, suggesting informed capital was positioning ahead of the technical catalyst. Institutional Buying Signals On-chain metrics reveal compelling evidence of institutional participation in Ethereum's recent surge. Blockchain analytics firm Glassnode reported a substantial increase in large-value transactions exceeding $1 million in the 72 hours surrounding the Pectra implementation, with transaction volume reaching levels not seen since late 2023. Several key metrics support this institutional narrative: 1. Exchange outflows have accelerated, with over 200,000 ETH leaving centralized exchanges in a single 48-hour period post-Pectra, indicating buyers intend to hold rather than trade. 2. The number of addresses holding more than 1,000 ETH increased by 2.8% in just one week, representing substantial accumulation by wealthy entities. 3. Futures open interest has expanded by over $2 billion since the Pectra announcement, demonstrating increased leveraged positioning. 4. Options markets show a significant skew toward calls, with the put/call ratio reaching its lowest level in 14 months. These metrics collectively suggest that smart money sees the Pectra upgrade as a legitimate inflection point for Ethereum rather than a temporary technical bounce. The Long Position Explosion Perhaps most intriguing is the dramatic increase in long positions across various trading platforms. Data from cryptocurrency derivatives exchanges shows that long-to-short ratios have reached levels not seen since Ethereum's previous major bull run in 2021. This positioning dynamic creates an interesting technical setup where further price increases could trigger a positive feedback loop as short sellers are forced to cover their positions, potentially accelerating ETH's upward movement. Retail Sell-Off vs. Whale Accumulation A fascinating dynamic has emerged in Ethereum's market structure: while retail investors appear to be reducing exposure, larger entities ("whales") are aggressively accumulating. This divergence in behavior between market participants has created an unusual tension in ETH's price action. Blockchain analytics firm Santiment reported that addresses holding between 0.1 and 10 ETH have decreased their collective holdings by approximately 3% over the past month, indicating retail profit-taking or repositioning. Simultaneously, addresses holding over 1,000 ETH have increased their positions by nearly 7%. This pattern often emerges during major market transitions, where retail participants, scarred by previous drawdowns, remain skeptical of recovery signals while institutional investors position for longer-term trends based on fundamental catalysts. This dynamic creates an interesting market structure where future price movements may depend on which cohort ultimately proves correct in their assessment of Ethereum's prospects. Technical Breakout Analysis From a technical analysis perspective, Ethereum's 20% surge represents a significant breakout from multiple resistance levels that had contained price action for months. The move pushed ETH decisively above its 200-day moving average, a key indicator watched by trend-following traders. The volume profile accompanying the move also supports the legitimacy of the breakout, with transaction volume reaching its highest level in nine months. This high-volume breakout typically indicates strong conviction behind the price movement rather than a technical fake-out. Additionally, the Relative Strength Index (RSI), while showing overbought conditions in the short term, has broken out of a long-term downtrend on higher timeframes, suggesting potential for sustained momentum despite possible near-term consolidation. Macro Context and Ethereum's Narrative Shift Ethereum's dramatic move occurs against a complex macroeconomic backdrop that had previously contributed to crypto market weakness. Recent signals of potential monetary policy shifts, including discussions of rate cuts by central banks, have created a more favorable environment for risk assets broadly. Beyond pure price action, Ethereum's narrative has evolved considerably in recent months. After facing criticism regarding high transaction fees and scaling limitations, the successful implementation of Pectra addresses several key concerns that had dampened enthusiasm for the network. The upgrade's focus on reducing gas fees and improving transaction throughput directly counters the competitive threats from alternative Layer 1 and Layer 2 solutions that had been gaining traction by positioning themselves as more efficient alternatives to Ethereum. This narrative rehabilitation, combined with Ethereum's established network effects and developer ecosystem, creates compelling fundamental support for the recent price action. Sustainability Questions and Potential Challenges While enthusiasm surrounding Ethereum's post-Pectra surge runs high, significant questions remain regarding the sustainability of this momentum. Several potential challenges could impact ETH's trajectory in the coming months: 1. Technical Overextension: The speed and magnitude of the 20% move have pushed short-term technical indicators into overbought territory, potentially setting up conditions for a correctional pullback. 2. Regulatory Uncertainty: The evolving regulatory landscape for cryptocurrencies, particularly regarding potential security classifications and staking activities, continues to create background uncertainty for Ethereum. 3. Competitive Pressures: Despite Pectra's improvements, alternative blockchains continue to innovate rapidly, potentially challenging Ethereum's dominance in specific use cases. 4. Macro Reversal Risk: Any shift back toward hawkish monetary policy could negatively impact risk assets broadly, potentially including Ethereum despite its technological progress. 5. Execution Risk: While Pectra's implementation was successful, future technical upgrades still carry execution risk that could impact market confidence. Conclusion: A Genuine Turning Point? As market participants attempt to determine whether Ethereum's "insane" 20% candle represents a genuine turning point or a temporary deviation, the weight of evidence increasingly suggests this could indeed mark a significant inflection point in ETH's market cycle. The confluence of technical breakouts, on-chain accumulation signals, derivative positioning, and fundamental improvements through the Pectra upgrade creates a compelling case for sustained momentum. The divergence between retail selling and institutional accumulation further supports the notion that a meaningful market transition may be underway. However, sustainable price appreciation will likely require continued technical execution, expanding adoption metrics, and at minimum, a neutral macro environment that doesn't actively handicap risk assets. For investors and traders, the coming weeks will be crucial in determining whether Ethereum can build upon this momentum or if the surge represents another false dawn in a challenging market. But regardless of short-term price action, the successful implementation of Pectra unquestionably strengthens Ethereum's long-term value proposition as a leading blockchain infrastructure platform.
COINBASE:ETHUSD
by bryandowningqln
one last dancegm. you finally woke up and ethereum was soaring. you saw the bounce. the reclaim. the headlines. you convinced yourself the bottom was in. you drew trendlines, watched influencers say “we’re so back.” you wanted to believe. and that’s exactly what wave B needed. because this wasn't a breakout. it’s a reset. a psychological rinse, engineered to bait late longs and build fuel for the final l i q u i d a t i o n. this is the macro (W)-(X)-(Y). not hopium, not dreams structure. wave A brought devastation. wave B brought complacency wave C brings the execution. make no mistake: we’re not going up, we’re being set up. the chart says $742. you call it impossible. but the market doesn’t care what you believe. the market only exists to find the maximum pain, your maximum pain. eth to $700 is not a prediction. it’s a scheduled event. and you’re RSVP’d unless you wake up. wave C of wave (Y) is coming. and it doesn’t care how bullish you feel. ---
CRYPTO:ETHUSDShort
by notoriousbids
23
ETHUSD INTRADAY bullish breakout supported at 2,190The ETH/USD pair maintains a bullish overall sentiment, underpinned by a sustained upward trend. Key Levels: Support: 2,190 (primary), followed by 2,123 and 2,046 Resistance: 2,625, with extended targets at 2,725 and 2,850 A corrective dip toward the key support zone at 2,190 could offer a bullish rebound opportunity. A successful bounce from this level would reinforce the uptrend and pave the way for a test of the 2,625 resistance. A breakout above this level may open the door to further gains toward 2,725 and 2,850 over the longer term. Conversely, a decisive break and daily close below 2,190 would invalidate the bullish setup, potentially triggering a deeper pullback toward the 2,123 and 2,046 support levels. Conclusion: While the broader trend remains bullish, ETH/USD is currently consolidating. Traders should watch the 2,190 support closely—its defence may confirm trend continuation, while a breakdown could signal a short-term bearish reversal. This communication is for informational purposes only and should not be viewed as any form of recommendation as to a particular course of action or as investment advice. It is not intended as an offer or solicitation for the purchase or sale of any financial instrument or as an official confirmation of any transaction. Opinions, estimates and assumptions expressed herein are made as of the date of this communication and are subject to change without notice. This communication has been prepared based upon information, including market prices, data and other information, believed to be reliable; however, Trade Nation does not warrant its completeness or accuracy. All market prices and market data contained in or attached to this communication are indicative and subject to change without notice.
TRADENATION:ETHUSD
by TradeNation
ETH/USD LONG SETUPThe Ethereum chart displays a clear bullish breakout from a consolidation phase, driven by strong upward momentum. The price surged after holding above an ascending trendline, indicating buyer strength. However, as the move extends, it approaches a potential resistance zone where price exhaustion may occur. This presents a favourable setup for a short trade if reversal signs appear, such as bearish patterns or weakening volume. Traders should monitor closely for entry confirmation to capitalize on a pullback. The strategy focuses on a high-to-low retracement toward previous support, aligning with risk-managed short-selling principles. Entry: 1,980 Target Point: 2,300
BITSTAMP:ETHUSDLong
by Trend_logic
Ether is following the up trend If Ethereum closes above $2,345 with strong volume, it suggests bulls are in control and could push prices toward the next resistance at $2,400. Failure to Break: If Ethereum fails to move past $2,345 and gets rejected, it could indicate that selling pressure is too strong, leading to a pullback. Retest & Confirmation: Sometimes, price may briefly break above resistance but fail to hold. A successful retest where the resistance turns into support strengthens bullish momentum. Volume & Momentum: Higher trading volume near resistance suggests strong market interest. Weak volume near resistance may indicate an upcoming rejection.
COINBASE:ETHUSDLong
by thetradinglord28
2
Ethereum Faces the 'Symplegades'– Will Pectra Propel It Through?Ethereum Faces the 'Symplegades' – Will Pectra Propel It Through? ⚔️🪨 Ethereum Faces the 'Symplegades' – Will Pectra Propel It Through? 🪨⚔️ In ancient Greek myth, the Symplegades — Clashing Rocks — tested Jason and the Argonauts with a narrow, deadly passage. Today, Ethereum faces its own mythic trial as price action presses into a critical zone. 📍 The $2,805–$2,848 resistance zone is acting like the Clashing Rocks — volatile, dangerous, and decisive. Beneath it, support rests near $2,616 and $2,565 . A breakout from this trap can open the way to $3,200+ , but rejection may mean another violent plunge. ⚠️ 🔧 Enter: PECTRA – Ethereum’s Game-Changing Upgrade Ethereum’s most ambitious upgrade since The Merge is nearly here. PECTRA isn’t just a backend update — it redefines how the network feels and functions: 🧠 Smarter Wallets – Batch transactions – Skip approval popups – Pay gas in any token ⚡ Frictionless UX – Fewer clicks – No more endless “approve + confirm” loops 📉 Cheaper Transactions – More blobs = better L2 scaling – Lower fees, even during congestion 🌱 Staking Overhaul – Validator cap raised to 2048 ETH – Smart contract withdrawals – Faster deposit recognition 🔓 Unlocking $490B in trapped value – Assets become more accessible and usable “The Merge changed how Ethereum works. Pectra changes how it feels. ” – @ethereum ⛵ Will ETH Break Through the Clashing Rocks? This is not just another consolidation box. It’s a moment of mythic symmetry — where price action, fundamentals, and network transformation converge. Sail through the Symplegades... or get crushed between them? Stay sharp. Watch the breakout. The next move will be defining. One Love, The FXPROFESSOR 💙
BITSTAMP:ETHUSDLong
by FX_Professor
1
ETH/USD..4h chart pattern..Here’s a **high-conviction ETH/USD buy setup** with precise risk management and multi-target strategy: --- ### **ETH/USD Buy Trade Plan** **✅ Entry Zone:** **$1920-1950** (Demand area below breakout) **🎯 Targets:** - **1st TP: $2035** (+85-115 pts) - **2nd TP: $2105** (+155-185 pts) **🛑 Stop Loss:** **$1880** (Below support, -70 pts risk) ### **Key Technical Logic** 1. **Support Flip Play:** - **$1920** was resistance, now acting as support (confirmed on 4H close above). - Strong bids likely at **$1900-1950** (institutional order block). 2. **Bullish Structure:** - Higher lows on daily chart + MACD crossing bullish. 3. **Target Math:** - **$2035:** Recent swing high (liquidity pool). - **$2105:** Measured move from last pullback (1.618 Fib extension). ### **Entry Triggers (Choose Wisely)** - **Aggressive:** Buy dips to **$1940-1950** with tight SL ($1880). - **Conservative:** Wait for **bullish reversal candle** (e.g., hammer) at $1920. ### **Trade Management** - **Scale Out:** Close 50% at $2035, trail SL to breakeven. - **Let Winners Run:** Hold 50% to $2105 (watch for rejection candles). - **Emergency Exit:** If Bitcoin dumps hard (ETH correlation >90%). ### **Invalidation Scenario** - Daily close **below $1880** = False breakout (cancel trade). --- ### **Critical Confluences** - **BTC Dominance:** Falling = Altcoin bullish (ideal for ETH). - **Ethereum Fundamentals:** ETF news, staking inflows. --- **Need Adjustments?** I can add: - Shorter-term scalp levels (e.g., $2000 quick exit). - Liquidity zones (stop hunts below $1900). - On-chain data (whale accumulation signals). Let me know your preferred style! 🚀
COINBASE:ETHUSDLong
by Algo_Trading_Mql5
Buy Ethereum: This coin lags BitcoinHello, The Ethereum coin is a great coin to consider adding to your portfolio. Bitcoin has rallied over the past few days passing above $100K yesterday and looks poised to break the previous high as more money begins flowing in. For those not already invested, we see an opportunity in boarding the Ethereum train as investors who missed the Bitcoin rally are likely to pack their money here. From a technical perspective the coin is still trading at the bottom and is at a great entry point. The target for this coin is $4,400 giving a return over 100% from the current price. The MACD indicator is also heading to 0 crossover further strengthening our view for a solid buy. Don't let this opportunity pass. Ethereum's fundamentals, market dynamics, and technical setup align for a powerful breakout. Act now to position yourself ahead of the curve. Disclosure: I am part of Trade Nation's Influencer program and receive a monthly fee for using their TradingView charts in my analysis.
TRADENATION:ETHUSDLong
by thesharkke
Ethereum - Perfect exactly how I thoughtEthereum Stage 1 - Triangle Pattern - Gave perfect breakdown of triangle pattern Stage 2 - Form M Pattern - Have almost completed the selling target Stage 3 - Retesting completed *Current) Stage 4 - Forming inverse cup and handle and inverted head and shoulder pattern Stage 5- in either of the scenario it may come down but if it goes above 2297 expect it to reach 4000/500/7000 in coming days Stage 5.2 - if the retesting is completed and bearish patter is continued expect it to reach to 900 USD For more details ping me GK Trade manthan
COINBASE:ETHUSD
by GKTrademanthan
Ether-Bitcoin Ratio Signals ETH Is 'Extremely Undervalued,' The cryptocurrency market is a realm of intricate signals, complex metrics, and often-conflicting narratives. Among the myriad indicators traders and investors scrutinize, the Ether-Bitcoin (ETH/BTC) ratio holds a prominent place. This metric, a simple division of Ethereum’s price by Bitcoin’s price, serves as a barometer for the relative strength and market sentiment between the two leading crypto assets. Recently, this ratio has dipped to levels that historically signaled significant undervaluation for Ether, sparking debate about a potential upcoming rally. However, a confluence of factors – notably surging ETH supply, stagnant network demand, and a weakened token burn mechanism – casts a considerable shadow over this optimistic outlook, suggesting that past performance may not be a reliable guide in the current, uniquely challenging environment. Understanding the ETH/BTC Ratio: A Barometer of Relative Strength At its core, the ETH/BTC ratio reflects the market's perception of Ethereum's value proposition relative to Bitcoin. When the ratio trends upwards, it indicates that ETH is outperforming BTC, suggesting growing investor confidence in Ethereum's ecosystem, technological advancements, or utility. Conversely, a declining ratio signifies BTC's relative strength, potentially due to factors like "digital gold" narratives, safe-haven appeal, or specific Bitcoin-centric catalysts. A low ETH/BTC ratio, such as those observed in recent times, is often interpreted by analysts as a sign that ETH is "cheap" or "undervalued" compared to Bitcoin. The logic is that, over time, capital flows within the crypto market tend to seek out assets with stronger growth potential or those perceived as lagging behind their fundamental value. If ETH is indeed undervalued, the expectation is that it will eventually catch up, leading to a rally in both its USD price and its value relative to BTC. This potential for "mean reversion" or a "catch-up trade" is what excites many market participants when the ratio hits historical lows. Historical Precedents: When Undervaluation Sparked Rallies The argument for an impending ETH rally based on the current low ETH/BTC ratio is not without historical merit. There have been several instances where a depressed ratio preceded substantial upward movements for Ether. 1. Post-2018 Crypto Winter: After the ICO boom and subsequent crash, the ETH/BTC ratio languished for an extended period. However, as the DeFi (Decentralized Finance) ecosystem began to gain traction in 2020 ("DeFi Summer"), ETH, as the foundational layer for most DeFi protocols, experienced a resurgence. The ratio climbed significantly as capital flowed into Ethereum to participate in yield farming, lending, and decentralized exchange activities. 2. The NFT Boom (2021): The explosion of Non-Fungible Tokens (NFTs) in early 2021, predominantly on the Ethereum blockchain, provided another major catalyst. The increased demand for ETH to mint, buy, and sell NFTs pushed its price and the ETH/BTC ratio upwards, as Ethereum's utility as a platform for digital collectibles and art became undeniable. 3. Anticipation of The Merge (2021-2022): As Ethereum moved closer to its pivotal transition from Proof-of-Work (PoW) to Proof-of-Stake (PoS) – "The Merge" – market sentiment turned increasingly bullish. The promise of significantly reduced energy consumption, coupled with the "ultrasound money" narrative (where ETH issuance would drastically decrease and potentially become deflationary due to EIP-1559's burn mechanism), fueled strong buying pressure. The ETH/BTC ratio saw notable gains during periods of heightened Merge anticipation. In these instances, the low ETH/BTC ratio acted as a tinderbox, and specific fundamental catalysts served as the spark that ignited significant rallies. Investors who recognized the undervaluation signal and anticipated these catalysts were handsomely rewarded. This historical pattern underpins the current optimism among some analysts who see the present low ratio as a similar buying opportunity. The Complicating Factors: Why This Time Might Be Different Despite the compelling historical precedents, the current market environment for Ethereum presents a unique set of challenges that complicate the simple "undervalued, therefore rally" thesis. These headwinds stem from fundamental shifts in Ethereum's tokenomics and network dynamics. 1. Surging Supply: The Post-Merge Issuance Reality While The Merge successfully transitioned Ethereum to a more environmentally friendly PoS consensus mechanism, its impact on ETH supply has been more nuanced than initially portrayed by some bullish narratives. • Staking Rewards: Under PoS, new ETH is issued as rewards to validators who stake their ETH to secure the network. While the rate of new ETH issuance is significantly lower than it was under PoW, it is still a consistent inflationary pressure. The annual inflation rate from staking rewards is currently in the low single digits. • Net Issuance vs. Deflation: The "ultrasound money" thesis largely depended on the EIP-1559 burn mechanism (discussed later) consistently burning more ETH than is issued through staking rewards, leading to a net deflationary supply. However, this has not always been the case post-Merge. There have been extended periods where ETH has been net inflationary. • Unstaking and Liquid Staking Derivatives: The ability for validators to unstake their ETH (enabled by the Shanghai/Capella upgrade) means that previously locked supply can re-enter the market. Furthermore, the proliferation of Liquid Staking Derivatives (LSDs) like Lido's stETH or Rocket Pool's rETH, while enhancing capital efficiency, also means that staked ETH is not entirely removed from liquid circulation, as these derivative tokens can be traded or used in DeFi. This consistent, albeit reduced, issuance contributes to sell pressure, especially if demand does not keep pace. The narrative of ETH becoming a deflationary asset has been weakened, impacting one of the key bullish arguments that previously supported a higher ETH/BTC ratio. 2. Flat Demand: A Stagnant Network Picture For ETH's price to appreciate significantly, there needs to be robust demand for the token, driven by network usage and adoption. Currently, several indicators suggest that demand is, at best, flat, and in some areas, declining. • Network Activity Metrics: Key on-chain metrics such as daily active addresses, transaction counts, and total gas consumed have shown periods of stagnation or even decline. While Layer 2 scaling solutions are processing more transactions, this activity doesn't always translate directly into proportional demand for ETH on the mainnet, especially if Layer 2s manage their own fee markets efficiently. • Total Value Locked (TVL) in DeFi: While DeFi remains a cornerstone of Ethereum's value proposition, the growth in TVL has slowed considerably compared to the explosive growth seen in 2020-2021. Capital inflows into DeFi protocols on Ethereum have been less aggressive, partly due to macroeconomic conditions, regulatory concerns, and the emergence of competitive DeFi ecosystems on other blockchains. • Competition from Alternative Layer 1s and Layer 2s: Ethereum faces increasing competition from other Layer 1 blockchains (e.g., Solana, Avalanche, Aptos, Sui) that offer higher throughput and lower transaction fees, attracting users and developers. Moreover, Ethereum's own Layer 2 ecosystem (e.g., Arbitrum, Optimism, Polygon zkEVM, Starknet, zkSync Era), while crucial for its long-term scalability, also fragments user activity and can, in some ways, reduce direct demand pressure on ETH for L1 transactions if users primarily operate within these L2 environments. • Macroeconomic Headwinds & Regulatory Uncertainty: Broader economic conditions, including inflation, interest rate hikes, and recession fears, have generally dampened risk appetite across financial markets, including crypto. Additionally, the ongoing regulatory uncertainty in key jurisdictions like the United States creates an environment of caution, potentially hindering institutional adoption and large-scale investment in assets like ETH. • NFT Market Cool-Down: The NFT market, which was a significant driver of ETH demand, has experienced a substantial cool-down from its peak in 2021-2022. While innovation continues, transaction volumes and average sale prices have fallen, reducing the ETH velocity associated with this sector. Without a significant uptick in genuine network demand – more users transacting, more capital flowing into DeFi, a resurgence in NFT activity, or new killer dApps emerging – it becomes harder for ETH to absorb the ongoing supply issuance and stage a sustainable rally. 3. Weakened Burn Mechanics: The Diminished Impact of EIP-1559 EIP-1559, implemented in August 2021, was a landmark upgrade for Ethereum. It introduced a mechanism where a portion of every transaction fee (the "base fee") is burned, permanently removing that ETH from circulation. This was a key pillar of the "ultrasound money" narrative, as it created a deflationary pressure that could, under conditions of high network demand, outpace new ETH issuance. However, the effectiveness of this burn mechanism is directly tied to network congestion and the level of the base fee. • Lower Network Congestion: In periods of lower network activity and congestion (as has been observed more frequently recently), the base fee required to get transactions included in a block decreases. A lower base fee means less ETH is burned per transaction. • Impact of Layer 2s: As more transaction activity shifts to Layer 2 scaling solutions, which have their own, typically much lower, fee structures, the demand for block space on Ethereum Layer 1 can decrease. While L2s do periodically batch transactions and settle them on L1 (consuming L1 gas and contributing to the burn), the overall L1 gas consumption directly attributable to individual user transactions might be lower than if all those transactions occurred on L1. • Periods of Low Burn: Consequently, there have been extended periods post-Merge where the amount of ETH burned via EIP-1559 has been insufficient to offset the ETH issued as staking rewards. During these times, ETH's supply becomes net inflationary, undermining the deflationary narrative that was a strong catalyst in previous cycles. While EIP-1559 remains a crucial and beneficial upgrade for Ethereum's fee market predictability, its power as a consistent deflationary force has been tempered by the current realities of network demand and the evolving Layer 2 landscape. Synthesizing the Outlook: A Tug-of-War The current situation for Ethereum is a complex tug-of-war. On one side, the historically low ETH/BTC ratio flashes a compelling "undervaluation" signal, suggesting a potential for significant upside based on past market behavior. This attracts traders looking for relative value plays and those who believe in Ethereum's long-term fundamental strengths. On the other side, the fundamental picture is clouded by persistent, albeit reduced, supply issuance, a lack of explosive growth in network demand, and a burn mechanism whose deflationary impact is currently muted. These factors create genuine headwinds that could prevent ETH from easily replicating its past ratio-driven rallies. For ETH to truly capitalize on its apparent undervaluation relative to Bitcoin, several things likely need to occur: 1. A Resurgence in Demand: This could come from a new "killer app" or narrative on Ethereum, a significant rebound in DeFi or NFT activity, increased institutional adoption (perhaps spurred by clearer regulation or new investment products like spot ETH ETFs in more jurisdictions), or a general improvement in macroeconomic conditions that boosts risk appetite. 2. Successful Maturation and Value Accrual from Layer 2s: As Layer 2 solutions mature and gain wider adoption, their success needs to translate into tangible value accrual for ETH itself. This could happen through increased L1 settlement demand, the use of ETH as a primary gas token on L2s, or innovative mechanisms that tie L2 economic activity back to the L1 token. EIP-4844 ("Proto-Danksharding") is a step in this direction by aiming to reduce L2 transaction costs, potentially fostering more L2 activity and, consequently, more L1 settlement. 3. A Shift in Broader Market Sentiment: Often, major altcoin rallies, including for ETH, occur after Bitcoin has established a strong uptrend and market sentiment becomes broadly bullish. A sustained Bitcoin rally could create a "wealth effect" and encourage capital to rotate into ETH and other altcoins. Conclusion: Caution Warranted Despite Undervaluation Signals While the ETH/BTC ratio strongly suggests that Ether is trading at a significant discount compared to Bitcoin, historical precedent alone may not be enough to guarantee a rally in the current market. The fundamental challenges posed by ongoing supply, relatively flat demand, and a less potent burn mechanism are significant and cannot be ignored. Investors and traders eyeing ETH must weigh the allure of its apparent undervaluation against these tangible headwinds. A potential ETH rally is likely contingent not just on the ratio mean-reverting, but on a demonstrable improvement in Ethereum's core demand drivers and a favorable shift in the broader market environment. The "extremely undervalued" signal is a call for attention, but thorough due diligence and a clear understanding of the current complexities are more crucial than ever. Ethereum's long-term vision remains ambitious, but its path to reclaiming relative market dominance against Bitcoin in the near term appears more challenging than in previous cycles.
COINBASE:ETHUSDLong
by bryandowningqln