Every time the price of Ethereum rises a bit, the community square is filled with calls of 'breaking 3000 is not a dream'; but as soon as the price slightly falls, it instantly becomes the target of insults like 'trash coin' and 'worse than Shiba Inu coin'. This extreme reaction is actually a typical reflection of the 'retail investor mentality' — blindly chasing rises and selling during dips, completely ignoring the fundamentals and data logic of the asset.
Real investors should focus on on-chain data, capital flow, and macro risks, rather than short-term price fluctuations. This article will delve into the current challenges and value of Ethereum, taking recent volatility as the main axis, guiding you out of the trap of 'emotional trading'.
I. Recent negative news does not equal value collapse: Recognize the source of the storm.
The recent decline in Ethereum actually has multiple quantifiable and observable negative sources, and is not a systemic collapse.
1.1 Shift in Federal Reserve policy: High interest rates are the biggest pressure on risk assets, with the U.S. core PCE index still above 3.5%. Coupled with recent hawkish remarks from Federal Reserve officials indicating 'no rush to cut interest rates', market expectations for no rate cut in September have surged. This has led institutions to withdraw from risky assets, including tech stocks, Bitcoin, and Ethereum.
→ Rational analysis: This is a short-term liquidity tightening caused by increased capital costs, not a problem with Ethereum's technology or applications themselves.
1.2 European politics and Trump’s tariff shadow: Expectations of a trade war are rising, and risk aversion is warming up. Current President Trump plans to impose new tariffs on EU technology and energy products starting June 1, triggering global trade tensions. This will lead to a global shift of funds towards safe-haven assets like the dollar, gold, and short-term bonds.
→ Rational analysis: This is a natural phenomenon linked to cross-market macro volatility, which has not changed the position of Web3 and Ethereum in digital asset infrastructure.
1.3 On-chain activity temporarily declines: but it hasn't reached a panic stage. According to data from Artemis and Glassnode: Ethereum's daily transaction fee revenue remains stable and has not collapsed, while the total value locked (TVL) in DeFi has decreased: the main reason being price volatility and adjustments in the value of risk assets, rather than a mass outflow of users. NFT transactions and L2 activities have experienced a cooling period, but the number of transactions remains stable above the post-pandemic average range.
→ Rational analysis: The market is in a correction period, and it is not a user or technical collapse.
II. Retail investor mentality vs. professional mentality: Let data speak, not emotional fluctuations.
What is the 'retail investor mentality'?
Focusing on price rather than structure: thinking a drop means 'going to zero' and a rise means 'bull market starting', overly relying on KOLs and influencers: ignoring data, reports, and on-chain analysis, lacking patience and risk control: selling at every drop, chasing at every rise, always buying at the peak and selling halfway!
What is a professional investment mentality?
Regularly track on-chain data: such as active address numbers, transaction fees, Gas prices, TVL, and capital flow, to judge whether short-term policies and macro risks are sustainable, and establish a reasonable price expectation model: calculating mid to long-term value through data such as NVT, ETH/BTC ratio, and EIP-1559 burn rate.
III. Positive signals from data: Not blind optimism, but prudent optimism.
The number of Ethereum holding addresses has reached a historic high, surpassing 110M addresses, indicating that long-term participants are still increasing; the EIP-4844 (Proto-Danksharding) deployment is expected to land in Q3 2025, which will further optimize L2 costs and provide infrastructure upgrades for DeFi and gaming; it is anticipated that actual enterprise applications in the Ethereum ecosystem (such as RWA, on-chain settlement, and ledger finance) will begin to expand in 2025, helping to enhance the connectivity of the real economy.
IV. How to establish a healthy mentality? Three practical suggestions for retail investors.
Stop short-term emotional trading: look less at candlesticks and more at cycles and on-chain data.
Establish a risk control model: you can refer to a distribution method of 50% cash + 30% mainstream coins + 20% high-risk assets.
Establish an information filter: follow professional research institutions (such as Glassnode, Messari, Delphi) rather than rumors.
Ethereum is not a god that will always rise, nor is it trash just because it drops a few percent. The truly skilled investors are not those who guess correctly on rises and falls, but those who can maintain clarity amidst volatility and make decisions based on data. If you are still selling everything at every small dip or going all-in at every rebound, then you are not an investor; you are merely a slave to emotions. The market will rise and fall, but you can choose: to be led by emotions or to use data to grasp the rhythm.