In this bull market cycle, many people have high hopes for ETH (Ethereum).
But the reality is: ETH has depreciated over 80% against BTC since its peak in 2021.
In the face of this performance, the market is filled with bearish sentiment, skepticism, and even 'FUD' (fear, uncertainty, and doubt) regarding ETH.
But the truly rational approach is to clarify why ETH is underperforming. Here are the top ten reasons leading to short-term pressure on ETH price:
1. Dencun Upgrade: Technological Advancement, Value Spillover
Dencun (EIP-4844) introduces 'blobs,' significantly reducing the data costs of L2 chains.
L2 transaction fees have decreased by 98%, significantly improving user experience, but this also brings side effects:
Mainnet fees reduced, ETH burning amount decreased.
L2 absorbs more value, rather than the Ethereum main chain.
The result is that the 'ultrasound money' narrative is weakened, and ETH price is under pressure.
2. ETF Effect Unmet
BTC spot ETF attracted over $40 billion, while ETH ETF only saw $200 million inflow.
One reason is that Grayscale held 3 million ETH in advance, and when these assets could be converted into ETF shares, it released huge selling pressure.
3. Emotional Collapse + Whales Exiting
Many whales exited their positions after ETH weakened and began to 'FUD' Ethereum on social media.
This is typical psychological behavior: Sell → Bearish → Market Falls → Self-Validation.
4. Ethereum Foundation's 'Coin Selling Controversy'
Every time the foundation sells a small amount of ETH (usually only a few hundred), the market triggers speculation: Does Vitalik lack confidence? Is it about to peak?
Although these sales are routine operations, they have intensified market sentiment volatility.
5. Vitalik's Personal Image
When investors are losing money, seeing Vitalik dancing and joking in public can further amplify emotions.
Regardless of fairness, as a project spokesperson, Vitalik's image sometimes affects public confidence.
6. Centralized Staking Structure
Despite Ethereum having over one million validators, the top 10 holding addresses control over 80% of staked ETH.
In addition, only 28% of ETH is staked, reflecting that the participation threshold for ordinary users is still high.
7. PECTRA Upgrade (EIP-7691): Further Fee Reduction, Decrease in Burning
The upgrade increases the number of Blobs from 3 to 6, further reducing L2 fees.
Efficiency improvement, but it also means less ETH is being burned, which suppresses the price.
8. EIP-7762: Stabilizing Gas Fees, Suppressing Price Elasticity
The upcoming EIP-7762 will prevent a surge in L2 fees during peak times, enhancing user experience.
But the problem is: Low fees = Low burning = Unfavorable for ETH price performance in the short term.
9. Narrative Transformation and Loss of Direction
Ethereum is transitioning from the 'main stage' of the DeFi ecosystem to a 'settlement layer + security layer.'
Although the technical direction is clear, there are internal disagreements within the community regarding future positioning, making ETH's medium to long-term vision somewhat vague.
10. The Rise of L2 Diverts Value
L2s like Base, Arbitrum, and Optimism are gradually absorbing resources from the main chain ecosystem.
In the past year, L2 has generated a total revenue of $140 million, with Base alone contributing $80 million.
Ethereum actively empowers L2, sacrificing short-term main chain value for overall scalability.
Summary:
Ethereum's technological development has never stopped, and ecological construction continues to advance.
But in the short term, these upgrades and transformations mostly benefit users, yet are unfriendly to ETH prices:
Transaction fees decrease → Burning decreases
L2 value increase → Main chain revenue transfer
Weak ETF effect → Investor expectations unmet
However, in the long run, ETH remains one of the strongest fundamental crypto assets. If future value capture mechanisms are linked to ecological use, ETH price is expected to rebound strongly.
📌 Short-term pain, long-term faith.
