Ethereum rebounded strongly. Can it usher in a real explosion in 2025?

Reprinted from chaincatcher

02/06/2025·18D

Original title: "Ethereum's rebound looks strong, but can it hold? The 2025 outlook"

Compilation: Vernacular Blockchain

A violent sell-off cleaned up the weak ETH positions in the market and then ushered in a sharp rebound. With new tariffs, giant whale movements and network upgrades advancing, is Ethereum ready for the bull market in 2025?

1. Diplomatic negotiations trigger ETH rebound

Ethereum (ETH) price trends In the past few days, Ethereum prices have experienced drastic fluctuations, falling to $2,150 on February 3, the lowest level since September 2024. This decline was mainly affected by the financial market's response to the new US tariff policy, which officially came into effect on February 1.

Tariffs hit the market, causing uncertainty. The U.S. government imposed a 25% tariff on imported goods from Canada and Mexico and imposed a 10% tariff on Chinese goods. This move quickly triggered uneasiness in the global market, and the crypto market was not spared.

Diplomatic intervention stabilizes market sentiment However, in just a few hours, diplomatic efforts were rapidly unfolding. Canadian Prime Minister Justin Trudeau announced on X (formerly Twitter) that he had a conversation with Donald Trump and successfully fought for a 30-day suffrage for both countries A broader border security agreement can be discussed during this period. This news brought a breath of breath to the market, and Ethereum prices also stabilized and rebounded.

Mexico has adopted a similar response strategy, with President Claudia Sheinbaum confirming that tariffs will be suspended for one month as part of the border security discussion.

Market sentiment improves, ETH price rebounds

Market sentiment has improved driven by these diplomatic progress. As of February 4, ETH price has rebounded to $2,700.

ETH once hit $2,900, Trump 's family speaks out

ETH prices briefly hit $2,900 after Trump announced a suspension of tariffs on Canada and Mexico. Almost at the same time, Eric Trump posted on X, saying, "In my opinion, now is a good time to increase your $ETH."

This remark further boosted the positive sentiment in the market.

Large transfers of DeFi related projects from the Trump family have attracted market attention

Eric Trump's remarks come as World Liberty Financial (WLFI) conducts large-scale funding mobilization. The DeFi project is closely related to Donald Trump, Donald Trump Jr. and Eric Trump.

According to data, WLFI has transferred eight assets of $3.0741 million to Coinbase Prime for financial management. This move has attracted market attention and may have further impact on market sentiment in digital assets such as Ethereum.

https://x.com/spotonchain/status/1886572108324725075?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1886572108324725075%7Ctwg r%5Ef39d77470064a7d15d206e3daa158fa4b431af84%7Ctwcon%5Es1 &ref_url=https%3A%2F%2Fcrypto.news%2Fethereum-price-prediction-2025-2030-outlook%2F_

2. WLFI unsolicited Lido and purchased ETH in large quantities

Soon after, World Liberty Financial (WLFI) unstaked 19,423 Lido staked Ethereum (stETH) and exchanged it for ETH. Immediately afterwards, the project used another $5 million USD to buy 1,826 ETH for $2,738.

Currently, WLFI still holds $96.62 million in various assets in nine known wallets, indicating that the project is still actively managing its crypto asset allocation.

While WLFI is operating, traditional financial giant Fidelity has also made eye-catching moves - on February 4, the institution purchased $49.75 million worth of ETH.

This series of capital flows shows that Ethereum not only rebounded strongly after market turmoil, but also attracted firm buying from institutional investors, further enhancing market confidence.

Despite institutional investment gains and prices rebound, Ethereum has fallen 15% in the past week and is still down nearly 45% from its all-time high of $4,890 (November 2021).

So, what exactly happened to the Ethereum ecosystem? How will these changes affect ETH's future price trends? Let's dive into it in depth.

3. Ethereum ecosystem update

Ethereum is undergoing critical adjustments to improve scalability and optimize transaction efficiency.

Gas Limit Improvement and Scalability Improvement

On February 3, Ethereum validators passed the proposal to increase Gas restrictions for the first time, which is also the first adjustment after the merger, marking another step forward in network expansion.

Adjust details:

Gas limit has increased from 30 million to 31 million, and may further increase to 36 million in the future.

Unlike the changes that required hard forks in the past, this adjustment is automatically effective, and more than 50% of validators have implemented it immediately after supporting it.

The importance of the Gas mechanism: Gas represents the computing power required to execute transactions and smart contracts. Each operation consumes a Gas fee, and Gas limit determines the total amount of computing that a single block can accommodate.

When the transaction volume exceeds the upper limit, users either wait for subsequent blocks or pay higher fees to prioritize transaction processing.

Increased Gas limits means that a single block can accommodate more transactions, improve network throughput and alleviate congestion.

Impacts and Challenges:

It helps complex DeFi applications, NFT platforms and on-chain services to run smoother.

But Gas restriction adjustments did not solve the core problem—transaction costs and speed.

Ethereum processes 1-1.5 million transactions per day, compared with Solana processes 60-65 million transactions, which is far more efficient than Ethereum and has lower transaction costs.

This means that the long-term scalability challenges of Ethereum remain, and L2 solutions and protocol upgrades remain crucial.

With the increase in Gas restrictions and other upcoming upgrades, can Ethereum narrow the gap with its competitors and lay the foundation for the market in 2025? Future network development is still worth paying close attention.

4. Ethereum’s market position and competitive challenges

In response to scalability and competitive pressures, Ethereum plans to launch the Pectra upgrade in early 2025, which is expected to significantly improve the scalability of L2 solutions.

1) Pectra Key Improvement: Blob Target Increase

Pectra upgrades increase the Blob target from 3 to 6.

Blob (large chunk packet) is a mechanism used by L2 solutions to temporarily store transaction data, avoiding direct writing to the Ethereum main chain.

Blob capacity enhancement increases the throughput of the L2 network, making it faster and less expensive to trade.

2) Layer-2 Ecology continues to expand

At present, Arbitrum, Optimism and zkSync have become important cornerstones for Ethereum expansion:

Arbitrum is TVL's highest L2 solution, significantly reducing costs by bulk packing Ethereum transactions and generating compressed proofs.

Optimism adopts a similar approach, but introduces an additional incentive mechanism to motivate developers to build applications on their networks through OP Tokens to enhance ecological vitality.

With the advancement of Pectra upgrade, Ethereum's L2 ecosystem will usher in more efficient transaction processing capabilities, further enhancing its advantages in scalability competition. However, in the face of competition from efficient and low-cost public chains such as Solana, Ethereum's market position still needs to be stabilized by continuously optimizing the L2 ecosystem and reducing user costs.

After these upgrades are implemented, whether Ethereum can dominate the bull market in 2025 still needs further observation.

3) zkSync: Zero-knowledge Rollup provides more advanced expansion

solutions

zkSync adopts zero-knowledge Rollup (zk-Rollup), providing more advanced scaling solutions that enable near-instant transactions while reducing fees.

While L2 solutions play an important role in easing Ethereum congestion problems, they also highlight the core differences between Ethereum and its competitors.

4) Ethereum vs. Competitive Public Chain: The Fundamental Difference in

Expansion Methods

Ethereum relies on Layer-2 solutions to improve scalability, while public chains such as Solana, Avalanche, and Sei natively support high throughput without additional expansion layers.

Solana: No need for L2, it can process tens of thousands of transactions per second, and the cost is extremely low.

Avalanche: Adopt subnet mechanism to improve scalability and support customized blockchain deployment.

Sei: Emerging high-performance chain, focusing on decentralized trading (DeFi) scenarios, with extremely fast trading speed.

In contrast, Ethereum still faces scalability challenges and needs to rely on L2 expansion. The underlying architecture of competing public chains already has the ability to efficiently handle large amounts of transactions, which puts Ethereum in greater competitive pressure in terms of scalability.

5) ETH/BTC trend is under pressure, and Ethereum market position is

challenged

In addition to technological competition, Ethereum's market performance has also been affected.

As of February 4, the ETH/BTC trading pair fell to 0.027, the lowest level since March 2021.

This ratio is down nearly 50% from a year ago, indicating that ETH is relatively weak compared to BTC, and market funds may be more inclined to Bitcoin or other competitive public chains.

Faced with technological upgrades and market position challenges, Ethereum's future competitiveness not only depends on the development of the L2 ecosystem, but also needs to continue to optimize in reducing transaction costs and improving mainnet performance. Otherwise, it may be further lost in the market competition in 2025. Advantages.

6) Bitcoin dominates market liquidity, and Ethereum's valuation is under

pressure

As Bitcoin continues to rise in market liquidity and investor attention, Ethereum's relative valuation is still under close observation of the market.

7) Can Ethereum stabilize its position?

ETH fell to $2,150: market deleveraging, clearing over-speculation Ethereum fell to $2,150 on February 3, not only affected by macroeconomic uncertainty, but also an adjustment to market deleveraging, clearing over-accumulated market High leverage longs.

Analyst @EmperorBTC noted, “There are a large number of low-quality ETH leveraged longs on the market that are forced to level when the price hits the $2,100 area.”

Data shows that Ethereum Open Interest reduced its position by $4 billion in a short period of time, which helped the market to re-stabilize to a certain extent.

After deleveraging, spot demand drives ETH rebound

After leverage clearance, Ethereum rebounded from $2,150 to $2,700 and was driven primarily by spot demand rather than leverage, indicating a healthier market base.

The support of spot buying means that market sentiment has recovered, laying a more stable foundation for ETH's future price trend.

5. Technical analysis: Key support positions for Ethereum testing

ETH briefly fell below the 200-week moving average (200 WMA), a technical indicator has long been an important support area.

Another trader pointed out that ETH touched the 0.618 Fibonacci retracement level, a level that is usually a key support at the bottom of the market cycle.

"ETH may have given the best 'gift' of 2025, breaking below 200 WMA in the early hours of the morning and testing a 0.618 Fibonacci retracement."

This technical pattern shows that ETH may have entered a phased bottom area, and if market demand continues to rebound, subsequent prices may rebound further.

However, ETH still needs to prove its competitiveness compared to BTC, and at the same time rely on the upgrade of Pectra and the promotion of the L2 ecosystem to enhance its market position.

1) ETH price rebounded to 200 WMA, but the macro environment still has

risks

Although ETH prices have re-established the 200-week moving average (200 WMA), historical data shows that Ethereum has experienced a strong rebound after testing this support level in August and September 2024.

However, the macroeconomic environment remains full of uncertainty:

The fuse of the market plummeting - the escalation of US tariffs has caused fluctuations in the global financial market.

Diplomatic negotiations Although market pressure has temporarily eased market pressure, potential retaliatory measures or further economic restrictions may still pose risks to market sentiment.

If global liquidity tightens or market risk appetite declines, Ethereum's recovery momentum may face challenges.

2) ETH/BTC trend: Does market funds tend to be more inclined to Bitcoin?

ETH/BTC continues to decline, indicating that market funds prefer Bitcoin, especially the inflow of institutional investors, is clearly biased towards BTC.

Ethereum Pectra upgrades and Gas restrictions may drive its ecosystem growth, but whether these improvements can truly bring real benefits to users and developers still determines the long-term needs of ETH in the future.

6. Ethereum price forecast: Will the decline reverse?

This market adjustment cleared billions of dollars in leveraged positions, putting ETH in a healthier market environment, but future price trends are still affected by multiple factors: scalability upgrades (Pectra, L2 development) Market adoption rate (DeFi, NFT ecological growth) Competitive pattern (challenges of public chains such as Solana and Avalanche) Macroeconomic environment (changes in interest rates and liquidity)

1) Ethereum price forecast for 2025

DigitalCoinPrice Forecast: ETH average price $5,510, up to $6,037 🔹 Changelly More optimistic: ETH average price $6,124, up to $7,194

Joe, co-founder of DeAgentAI, believes that Ethereum's current price trend is in line with historical patterns, and short-term bearish signals (such as the fall below 200 WMA on February 3) often require a more detailed interpretation.

He pointed out that historical trends in 2023 and 2024 show that ETH may undergo a sharp reversal near key support levels, so traders should pay attention to ETH's response to key support as an important signal to judge future trends.

Can Ethereum usher in a bull market in 2025?

ETH is currently in a remedial rebound stage. If the Pectra upgrade is implemented smoothly and the L2 ecosystem continues to expand, Ethereum is expected to attract market attention again and reverse the market share gap with Bitcoin. However, if macroeconomic turmoil continues, or competitive public chains further erode Ethereum's market share, the increase in ETH may be limited.

2) Ethereum price forecast 2027

If Ethereum continues to dominate the smart contract field and the expansion solutions are mature, ETH may see an increase in 2027.

DigitalCoinPrice Forecast: ETH average price is $9,580, up to $10,098.

Changelly forecast: ETH average $12,316 and up to $14,527.

At the same time, the growth of the DeFi ecosystem, innovation in the NFT field, and Ethereum’s role in real-world assets (RWA) tokenization may bring new demand to ETH.

However, if risky assets face tightening conditions, ETH prices may be subject to resistance, even if fundamentals improve.

3) Ethereum price forecast 2030

Long-term forecasts show that Ethereum may reach price levels that were unimaginable in the past.

DigitalCoinPrice Forecast: ETH average price is $14,829, up to $15,108.

Changelly forecast: ETH average $40,055, up to $47,066.

However, long-term forecasts are always accompanied by risks. Ethereum faces competition from Solana, Avalanche and emerging blockchain networks that are committed to providing lower fees and higher transaction speeds.

Although the ETH forecasting model remains optimistic, it is crucial to combine technology forecasts with real-world adoption trends before making long-term investment decisions. Therefore, you should be cautious when investing and do not invest funds that exceed your own ability.