Ethereum’s $2,600 Comeback: What Needs to Happen? 🤔💸

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So, Ether (ETH) decided to take a little tumble below $2,600 on Feb. 24. Classic move, right? Since then, it’s been like that friend who says they’re “just going through a phase” but never really gets out of it. The latest dip towards $2,000 triggered a whopping $918 million in leveraged long (bull) liquidations in ETH futures in just 15 days. Ouch! 📉

Now, traders are scratching their heads, wondering what on earth needs to happen for ETH to break above $2,500. Spoiler alert: it’s not just a magic spell. 🪄

Ether has been underperforming the altcoin market by 10% during this period. I mean, come on, even the chart above is judging it! 😬

And just when you thought it couldn’t get worse, this decline followed a memecoin frenzy that gave Ethereum’s main competitor, Solana (SOL), a serious boost. Talk about a kick in the gut! 🥴 It’s clear that some major issues need to be tackled before Ether can reclaim its throne in the bull market.

Ethereum’s upgrades and increased competition

Now, let’s talk about the upcoming Pectra upgrade on the Ethereum network. Some folks think it’s about as useful as a chocolate teapot. 🍫☕ Whether it lowers base-layer transaction fees or enhances usability, it’s still a bit of a letdown.

Even if the changes do improve the user experience, analysts are like, “Yeah, but what about interoperability?” It’s like trying to fit a square peg in a round hole—just not happening! 🔄

Recent reports of empty blocks on the Ethereum testnet have added to the risk perception. It’s like showing up to a party and realizing you’re the only one there. Awkward! 😳 Regardless of whether this issue is unrelated to the upcoming upgrade or easily fixable, traders are sweating bullets over potential delays.

In short, fear is the name of the game right now, and for that to change, we need to address some pressing issues. Critics are saying that part of ETH investors’ disappointment comes from the rise of indirect competitors, like the modular layer-1 Berachain, which is all about integrating liquidity and governance for DeFi applications. Sounds fancy, right? 💁‍♀️

Berachain has snagged over $3 billion in deposits, as measured by total value locked (TVL) on DefiLlama. Meanwhile, Hyperliquid, a perpetual futures application on its own blockchain, has surpassed $2.8 billion in open interest. It’s like a race, and ETH is lagging behind! 🏃‍♂️💨

For ETH’s price to regain its bullish momentum, traders need some serious reassurance that the Ethereum network offers practical and clear advantages. Otherwise, it’s just a pretty face with no personality. 😒

Weak on-chain activity and institutional demand

Now, let’s address the elephant in the room: the lack of demand from institutional investors. The spot ETF flows have been negative in nine of the last 10 trading days, resulting in $406 million in net withdrawals. Yikes! 😱

Some analysts are like, “Oh, demand could surge after the approval of native staking on Ethereum ETFs!” But honestly, that theory is looking shakier than a Jenga tower in an earthquake. 🌪️

Lower demand for blockchain processing has reduced the burn-fee mechanism, making Ether inflationary. So now, the adjusted native staking reward is below 2.5%, while stablecoin deposits are raking in up to 4.5% in most DeFi projects. Talk about a bad deal! 💔

Ultimately, the inclusion of staking in spot ETFs is unlikely to be a game-changer for institutional demand. And let’s not forget the looming threat of the US Securities and Exchange Commission possibly approving a spot Solana ETF in 2025. That’s like inviting your ex to your wedding! 😬

So,

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2025-03-11 00:43