1. Market Dynamics: Interest rate cut expectations ignite rising trend, Ethereum breaks through key resistance level
Against the backdrop of rising expectations for interest rate cuts by the Federal Reserve, Ethereum (ETH) continued its strong performance today. As of September 13, 3 PM, the ETH price was reported at $4748, with a 24-hour increase of 5.01%, and the total market capitalization approaching $580 billion. This upward momentum is directly related to the market's expectation that the Federal Reserve may initiate its first round of interest rate cuts next week—traders are generally betting that the Federal Reserve will cut rates four times in September, October, December, and January next year, each by 25 basis points, bringing the target rate down to 3.375%.
From a technical perspective, ETH's daily chart broke through the key resistance of $4450 and has continued to strengthen, approaching the $4600 threshold. The 2-hour cycle shows a fluctuating upward trend, with highs and lows gradually rising. The MACD momentum is recovering, indicating a bullish advantage. However, caution is needed regarding short-term technical correction risks, especially after consecutive increases, as some profit-taking may occur.
The drastic fluctuations in the contract market confirm the current market sentiment. In the past 24 hours, over $411 million in cryptocurrency contracts were liquidated across the network, affecting nearly 155,200 people, with nearly 80% being short liquidations. The liquidation amount for Ethereum-related contracts reached $143 million, more than double that of Bitcoin, reflecting a high level of bullish consensus on ETH in the market.
2. On-chain Data: Transaction Volume and Active Addresses Hit Four-Year Highs, Institutional Capital Accelerates Entry
The underlying momentum of the Ethereum network reached a historic peak in August, providing solid support for the current market uptrend. According to on-chain data, Ethereum's transaction volume exceeded $238 billion in August, a nearly 70% month-on-month increase, with a total of 46.67 million transactions, setting a monthly record, and the number of active addresses reached 17.55 million, all marking the highest levels since the 2021 bull market. This data not only reflects the recovery of upper-layer applications like DeFi and NFTs but also indicates that the real economic activities of Ethereum as a 'global settlement layer' are expanding substantively.
The movements of institutional capital are particularly noteworthy. BlackRock's iShares Ethereum Trust has seen inflows of $1.7 billion over the past 10 trading days, with on-chain ETH holdings increasing by 40%, bringing the total reserve to 498,884 ETH, valued at approximately $1.8 billion. Meanwhile, the US stock company Bitmine (BMNR) was revealed to hold over 833,000 ETH, with a total value of about $3 billion at current market prices. The phenomenon of new whale addresses continuously accumulating ETH is also quite significant— for example, an address starting with '0x86F' received 15,000 ETH (approximately $55.91 million) in one transaction, raising its total holding to 39,294 ETH.
The large-scale implementation of Layer 2 expansion solutions is a key factor driving the surge in on-chain activity. Layer 2 networks like Optimism and Arbitrum have reduced single transaction costs to under $1, making small payments and NFT minting feasible. In August, transactions processed by Layer 2 networks accounted for 42% of Ethereum's total transaction volume, an increase of 27 percentage points compared to the same period last year.
3. Technical Progress: Sharding Revolution Reshapes Scalability Landscape, Cancun Upgrade Enters Substantial Stage
Ethereum's technological iteration is at a critical juncture. As a transitional solution for sharding technology, EIP-4844 (Proto-Danksharding) has entered the Devnet 8 testing phase, with the mainnet expected to launch in Q4 2025. This upgrade will introduce the concept of 'data sharding,' which will reduce Rollup transaction costs by 90% by separating transaction data from computation, theoretically increasing throughput to 100,000 TPS. This breakthrough will completely resolve Ethereum's long-standing 'scalability trilemma' and lay the foundation for large-scale applications such as RWA (Real World Assets) on-chain.
The Fusaka upgrade plan further strengthens Ethereum's technological advantages. This upgrade includes 12 EIPs, among which EIP-7939 (bit manipulation acceleration) and EIP-7951 (Web2 compatibility) will enhance the efficiency of the EVM, while EIP-7907 (expanding contract size) will provide more space for complex DApp development. If successfully deployed, Fusaka will become another milestone following The Merge, expected to complete the mainnet upgrade by the end of 2025.
4. Ecology and Regulation: DeFi's Dominance Solidified, Policy Dividends Release Long-term Value
In the DeFi space, Ethereum still holds an absolute dominant position. As of September, the total locked value (TVL) in DeFi reached $242.61 billion, with Ethereum accounting for $163.6 billion, or 67.4%. Top protocols like Uniswap and Aave further consolidate their advantages through multi-chain deployment; for example, Aave's TVL on Avalanche has surpassed that of its native project, becoming the largest lending protocol on that chain. The structural changes in the stablecoin sector are particularly notable—Tether's USAT token, launched based on the US (GENIUS Act), marks the entry of compliant stablecoins into the mainstream financial system.
The improved regulatory environment injects long-term growth momentum into Ethereum. The EU's MiCA regulation defines ETH as a 'compliant digital asset,' and the Hong Kong (Virtual Asset Service Providers Regulation) took effect in September, clarifying the legal status of crypto assets. The (GENIUS Act) and (CLARITY Act) being advanced by the US Congress provide a clear regulatory framework for stablecoins and DeFi protocols, reducing compliance risks.
5. Competitive Landscape: The Rise of Solana and the Upgrade of Polygon, Highlighting Ethereum's Ecological Barriers
Despite the recent impressive performance of competitors like Solana, Ethereum's ecological barriers remain difficult to shake. Solana has risen over 20% in 7 days, with a market cap exceeding $130 billion, and institutions like Galaxy Digital have built the largest Solana reserve strategy through $1.65 billion in financing. However, its network has experienced multiple outages due to congestion, and the concentration of validating nodes (the top 20 control 45% of the staking amount) poses significant centralization risks. In contrast, Ethereum's 'modular architecture,' realized through Layer 2 and sharding technology, is more sustainable, with the number of developers (31,000 monthly active) being 3.5 times that of Solana, and 89% of leading DApps are built on Ethereum or its Layer 2.
Polygon's token upgrade plan (MATIC→POL) attempts to enhance competitiveness through unified ecological tokens but faces regulatory uncertainty—previously, the US SEC classified MATIC as a security, which may impact its development in compliant markets. In contrast, Ethereum has become the preferred choice for institutional funds due to its decentralized governance structure and mature compliance framework.
6. Institutional Strategy: From Speculation to Value Investment, ETH Becomes a 'New Reserve Asset'
Institutional allocation logic towards Ethereum is shifting from short-term speculation to long-term value holding. Wall Street giants like BlackRock and Morgan Stanley view ETH as the infrastructure of the 'digital dollar economy,' with the logic being: ETH serves as both the underlying settlement layer for stablecoin circulation and the core asset for staking yields (annualized 4.8%) and on-chain lending (collateral ratio of 44%). US stock companies such as SharpLink (SBET) and Bit Digital (BTBT) are increasing their ETH holdings through zero-leverage equity financing, constructing a positive cycle of 'corporate capital - protocol health.'
7. Risks and Outlook: Short-term Volatility Does Not Hinder Long-term Trends, Sharding Implementation Opens a New Era
In the short term, the market needs to be cautious of the 'buy the expectation, sell the facts' effect after the Federal Reserve's interest rate cut expectations materialize. Technical analysis shows potential bearish divergence signals on the ETH daily chart; if it fails to effectively break through the $4800 resistance level, a correction may occur. Additionally, the capital diversion effect from public chains like Solana may also phase out ETH's performance.
In the long term, Ethereum's technological iteration and ecological expansion will continue to release value. With the implementation of sharding technology and the influx of spot ETF funds, institutions predict that the ETH price will exceed $6000 by the end of 2025, with market capitalization returning to $500 billion. The deeper impact lies in Ethereum's evolution from a 'smart contract platform' to a 'global digital economy operating system,' as its applications in areas such as RWA and the metaverse will reshape the underlying logic of finance and society.
