In the tumultuous 2025 crypto market, where capital-seeking emotions run high, Ethereum, which has always claimed to be the 'king of smart contracts,' appears particularly silent. **The price hasn't returned to its highs, traffic is absent on-chain, the narrative has been taken, and even community enthusiasm is visibly declining.** Recently, Ethereum suddenly experienced a rebound, rising 20% and once again crossing the $2,400 mark. Is this rebound a mere respite, or the prelude to a genuine counterattack?
We must face one question: Why has Ethereum performed so poorly this round?
Ethereum's struggle: not only has it not risen, but its presence is gradually fading.
From the end of 2024 to now, Bitcoin has repeatedly hit new highs, standing at $90,000, $100,000, and even $107,000, gaining immense momentum. And Ethereum? Despite its attempts to rise alongside it, it has repeatedly pulled back and has not been able to reclaim the previous high above $3,700, even remaining in adjustment while Bitcoin stabilizes.
The BTC/ETH ratio is widening. From trading behavior to capital allocation preferences, the market has made it clear: institutions prefer Bitcoin, retail investors are more enthusiastic about meme coins, and Ethereum is being marginalized from both sides.
Why is this happening? The answer is not singular, but a series of structural issues.
Loss of momentum: BTC narrative + Meme craze leaves no room for ETH
In this bull market, Bitcoin has completed the 'national currency narrative' endorsement.
From Texas, Florida, and other U.S. state governments publicly accumulating BTC, to MicroStrategy (now Strategy) holding over 550,000 Bitcoins, Bitcoin is becoming a reserve asset at the national and institutional level, providing a high level of credit endorsement that Ethereum cannot participate in.
Meanwhile, what is the retail market speculating on? It's not DeFi, it's not NFTs, but meme coins on the Solana chain. Projects like Fartcoin, with market values often exceeding hundreds of millions, mostly come from Solana's PumpFun platform.
Yet all these trends have bypassed Ethereum. In contrast, the ETH main chain remains plagued by high gas fees, low efficiency, complex cross-chain asset management, and fragmented experiences between Layer 2s... With diminished interest and absent narratives, ETH naturally struggles to rise.
Layer 2 fragmentation: liquidity has been drained, making it difficult for the ETH main chain to benefit.
In theory, the prosperity of Layer 2 should feed back into the main chain's value, but reality is more complex.
Polygon, Optimism, Base, Linea, Arbitrum, etc., are each fighting their own battles. User assets and interactions are dispersed across different L2s, rather than on the ETH main chain. More importantly, transactions involve stablecoins like USDC, DAI, while ETH is merely 'present in the ecosystem' but not a necessary asset to consume.
This creates a paradox: on-chain activity is increasing, but the direct demand for ETH is declining.
The Mlion.ai platform points out through its on-chain data analysis features that since Q4 2024, ETH's role as 'fuel' in on-chain contract calls has been weakening, while the share of stablecoins and subnet tokens is rising, indicating that ETH's economic dominance is fading.
The rise of Layer 1s like Solana and Avalanche: not only competing for users but also developers.
Today's Solana is not just a faster, cheaper 'Ethereum alternative.' It has a complete development ecosystem, toolkits, and funding mechanisms—it's even completely outperformed ETH's main chain in user experience.
Solana's TPS regularly exceeds 3,000 at an extremely low cost; meanwhile, Ethereum's main chain still maintains 15 TPS, with Layer 2 packaging delays and fees remaining opaque. It's hard to ask regular users to 'tolerate' this disparity.
Beyond Solana, Avalanche is frequently breaking through in cross-chain asset protocols and institutional token issuance; Hyperliquid has become the new favorite for on-chain perpetual contracts; Tron firmly occupies the high ground for stablecoin issuance. Ethereum is being besieged from all sides.
Not interested in the institution? The allocation preference reveals ETH's value anxiety
The attitude of institutions best reflects the true market sentiment.
According to CoinGecko data, the total market capitalization of publicly traded companies holding ETH is less than $500 million; meanwhile, publicly traded companies with Bitcoin-related holdings have a total market capitalization exceeding $50 billion, and their numbers are continuously increasing.
The differences are also evident in ETFs: Bitcoin spot ETFs attracted hundreds of billions in funds upon launch, while the Ethereum ETF, although progressing, has seen minimal net inflows, most of which are passive funds for 'position replenishment,' rather than active allocations.
What does this mean? Ethereum's **'store of value asset' role is still unestablished**, while its positioning as a 'technology platform' is being eroded by Layer 2 and Solana, leaving ETH caught in a very awkward position.
Rebound opportunity? Ethereum's upgrade ignites hope, but it is far from enough.
Recently, Ethereum completed an important upgrade that mainly enhanced performance and L2 interaction efficiency, triggering a nearly 20% surge in ETH price within 24 hours, briefly breaking through $2,400.
However, as pointed out in the AI research report generated by Mlion.ai, this upgrade cannot fundamentally address the core issues of fractured data bridging, isolation of Layer 2 ecosystems, and the overly low dependency on the main chain's gas mechanism. Ethereum's structural issues cannot be solved by a single upgrade.
More importantly, this round of 'passive rebound' occurs during a period of overall market stabilization and brief consolidation of Bitcoin, lacking proactive narratives and continuous capital driving.
Mlion.ai perspective: Is this rebound a signal, or just noise?
For investors, the crucial question is: Is this ETH rebound a buy signal, or just noise to lure more in?
Mlion.ai recommends combining the following dimensions for intelligent judgment:
Direction of on-chain capital flow: Is there new capital inflow into ETH? Use address behavior analysis tools to see if 'whales' are positioning themselves;
KOL sentiment modeling: Are mainstream crypto opinion leaders starting to promote ETH again, or are they continuing to focus on chains like Solana?
ETF capital flow trends: Is there capital actively moving into ETH ETF products, or is it merely staying at verbal support?
L2 interoperability and bridging data: Are Layer 2s really interoperable? Is ETH becoming a central asset again?
If the above dimensions present a 'full green' signal, then Ethereum may indeed have ushered in the start of a new cycle. If it's merely a sentiment correction + short covering, it may just be an intra-structural rebound.
Summary: ETH has not exited the scene, but to truly make a comeback, there is still a long way to go.
The problem with Ethereum is not death, but 'mediocrity': it is no longer the center of narratives or the focal point of the market. It hasn't aged, but it has lost its eye-catching innovative power.
To truly return to the center stage, it needs not just a price rebound, but structural upgrades, a reshaping of narratives, and a reuniting of users/developers/institutions.
On this road, every signal, every policy, and every capital transfer could be a turning point.
Using AI research assistants like Mlion.ai to grasp dynamics in real-time, interpret on-chain signals, and predict trend turning points may be the best weapon to avoid being marginalized in this battle.
Disclaimer: The above content is for informational sharing only and does not constitute any investment advice. Investment carries risks; please proceed with caution.