Whenever Ethereum's price rises a bit, the community square is filled with calls of "breaking 3000 is not a dream"; however, as soon as the price slightly falls, it instantly becomes the target of insults like "junk coin" and "not as good as Dogecoin." This extreme reaction is a typical depiction of the "retail mindset"—blindly chasing highs and selling lows, completely ignoring the fundamentals and data logic of the asset.
True investors should focus on on-chain data, capital flows, and macro risks, rather than temporary price fluctuations. This article will delve into Ethereum's current challenges and value based on recent volatility, helping you avoid the trap of "emotional trading."
1. Recent negative news does not equal value collapse: recognize the source of the storm
The recent decline in Ethereum is actually due to several quantifiable and observable negative factors, not a systemic collapse:
1.1 Shift in Federal Reserve policy
High interest rates are the biggest pressure on risk assets. The U.S. core PCE index remains above 3.5%, coupled with repeated hawkish statements from Federal Reserve officials indicating they are "not in a hurry to cut rates," leading to high market expectations that rates will not be cut in September. This has caused institutions to withdraw from risk assets, including tech stocks, Bitcoin, and Ethereum.
→ Rational analysis: This is a short-term liquidity squeeze caused by increased capital costs, not an issue with Ethereum's technology or applications.
1.2 The shadow of European politics and Trump's tariffs
Rising expectations of a trade war and increasing risk aversion: current President Trump plans to impose new tariffs on EU technology and energy products on June 1, triggering global trade tensions. This will lead global capital to flow toward safe-haven assets like the dollar, gold, and short-term bonds.
→ Rational analysis: This is a natural phenomenon caused by cross-market macro fluctuations, and has not changed Web3 and Ethereum's position in the digital asset infrastructure.
1.3 On-chain activity has temporarily declined
But we are not yet at the panic stage, according to data from Artemis and Glassnode:
- Ethereum's daily fee income: remains stable and has not collapsed
- Total locked value (TVL) in DeFi has declined: but the main reason is price fluctuations and adjustments in risk asset values, not a mass outflow of users.
- NFT trading and L2 activity: after a cooling period, the number of transactions remains stable above the post-pandemic average range
→ Rational analysis: The market is in a correction phase, not a user or technology collapse.
2. Retail mindset vs professional mindset: let the data speak, not the emotional fluctuations
What is the "retail mindset"?
- Looking at prices without considering structure: thinking a drop means "going to zero" and a rise means "bull market initiation"
- Over-reliance on KOLs and influencers: neglecting data, reports, and on-chain analysis
- Lack of 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 mindset?
- Regularly track on-chain data: such as active address count, transaction fees, Gas prices, TVL, and capital flows
- Judge whether short-term policies and macro risks are sustainable
- Establish a reasonable price expectation model: calculate medium to long-term value through data such as NVT, ETH/BTC ratio, and EIP-1559 burn rate
3. Positive signals from the data: not blind optimism, but stable optimism
- The number of Ethereum holding addresses has reached a historic high, surpassing 110 million addresses, indicating that long-term participants are still increasing
- EIP-4844 (Proto-Danksharding) is expected to be deployed in Q3 2025, which will further optimize L2 costs and provide infrastructure upgrades for DeFi and gaming
- It is expected that by 2025, actual enterprise applications in the Ethereum ecosystem (such as RWA, on-chain settlement, and ledger finance) will begin to expand, helping to enhance the connection to the real economy
4. How to establish a healthy mindset? Three practical suggestions for retail investors
1. Stop emotional trading: look less at candlesticks and more at cycles and on-chain data
2. Establish a risk control model: refer to a 50% cash + 30% mainstream coins + 20% high-risk assets allocation method
3. Establish an information filter: track professional research institutions (such as Glassnode, Messari, Delphi) rather than rumors
Ethereum is not a deity that will always rise, nor is it garbage just because it drops a few percent. Truly skilled investors are not those who guess correctly on rises and falls, but those who maintain clarity amid volatility and make decisions based on data. If you are still selling everything at every slight drop or going all in at every rebound, then you are not an investor, just 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.