Ether (ETH), the second-largest cryptocurrency by market capitalization, is facing a defining moment. Over the past few months, its price has been in a downward spiral, dropping below $1,800—more than 50% lower than its position a year ago. With declining investor interest, a shrinking decentralized finance (DeFi) presence, and increasing competition from rival blockchains, Ethereum’s path forward looks uncertain.
Yet, beneath the surface, large investors, known as whales, are accumulating ETH, suggesting that some believe a turnaround is possible. So, is ETH on the verge of a deeper decline, or could it stage a comeback?
ETF outflows and staking restrictions weigh on ETH
One of ETH’s biggest challenges is the underwhelming performance of its spot exchange-traded funds (ETFs). While bitcoin ETFs have seen strong inflows—topping $37 billion—Ethereum ETFs have only attracted around $2.7 billion. Investor dmand is weakening, with Ethereum ETFs seeing outflows of $455 million over the past two weeks alone.
A key reason for this lackluster performance is the absence of staking in these ETFs. Staking allows ETH holders to earn rewards by helping secure the network, with current yields at about 3.25%. Since Ethereum is widely used for staking—over $73 billion worth of ETH is locked up—investors looking for returns may prefer holding ETH directly rather than through ETFs that don’t offer staking benefits.
Read also: Ether: Momentum builds amid spot Ether ETF inflows and bitcoin dominance decline.
Ethereum’s DeFi dominance slips amid liquidity outflows
Ethereum blockchain has long been the backbone of the DeFi sector, but its dominance is being tested. According to a report, the total value locked (TVL) across DeFi protocols fell sharply in February, dropping from $217 billion to $168 billion. Ethereum, which holds nearly 60% of DeFi’s liquidity, saw its own TVL decline by 27% to $97 billion.
While other blockchains, such as Solana and TRON, also experienced declines, Ethereum’s drop highlights broader concerns about liquidity and investor confidence. Meanwhile, newer blockchain projects like Berachain are gaining traction by offering higher staking rewards and more attractive DeFi incentives.
A Critical Price Level for ETH
ETH’s current price action suggests that it is at a crucial support level. After falling from a high of $4,107 in November 2023 to its current range, ETH now trades around $1,800 —an area that previously acted as strong support last year.
From a technical perspective, ETH is forming a bearish pattern known as a “triple top,” which could indicate further downside. If ETH breaks below $1,700, it could open the door to a deeper correction, possibly testing the $1,500 level. On the flip side, a rebound above $2,200 could signal a potential recovery.
The Relative Strength Index (RSI) shows oversold conditions, suggesting a short-term bounce is possible. However, for ETH to regain bullish momentum, it needs to reclaim key resistance levels and attract renewed investor confidence.
Competition heats up: Solana, Tron, and Layer-2 networks gain ground.
Apparently, Ethereum is no longer the dominant force it once was. Layer-1 competitors like Solana and BNB Chain, along with Layer-2 solutions such as Arbitrum and Base, are gaining market share. These networks offer lower fees, faster transactions, and growing ecosystems, making them attractive alternatives.
In 2025, Ethereum’s network fees stood at $202 million—lower than some of its competitors, including Jito, Uniswap, and Tron. This suggests that while Ethereum remains a key player, it is no longer the most profitable blockchain for network participants.
Even industry leaders are voicing concerns. Andre Cronje, co-founder of Sonic Labs, recently stated on X, “Hell, I don’t invest, but if I did, I would choose Solana, Tron, and XRP over ETH.” His skepticism underscores the growing perception that Ethereum’s position in the market is being challenged.
Whale activity hints at a potential reversal.
Despite the negative market sentiment, there are signs that large investors are betting on ETH’s recovery. Data from Santiment shows that whales have accumulated 1.10 million ETH in the past 48 hours, representing nearly 0.92% of Ethereum’s circulating supply.
Additionally, $1.8 billion worth of ETH was withdrawn from exchanges last week—the largest week outflow since December 2022. Such significant withdrawals often indicate long-term holding strategies rather than immediate selling pressure.
Historically, similar whale accumulation has led to price rebounds. In January 2025, a large ETH purchase of 330,000 coins preceded a brief rally. If history repeats, this recent accumulation could be a signal that some investors see value in ETH at these lower price levels.
While ETH is facing strong headwinds, some analysts believe history could repeat itself. Crypto analyst Merlijn The Trader noted that ETH’s current price pattern mirrors its 2016 cycle. If this trend holds, ETH could be in the “fake-out” phase—a period of uncertainty before a major rally.
However, for any significant breakout to occur, ETH needs to regain investor confidence, see renewed institutional interest, and overcome the liquidity challenges affecting DeFi.
Read also: Donald Trump’s win, Positive for Ethereum – ConsenSys CEO Joseph Lubin
Conclusion
ETH is at a crossroads. On one hand, its declining price, ETF outflows, and DeFi struggles paint a bearish picture. On the other, whale accumulation, historical price trends, and ETH’s continued place as a key cryptocurrency in the crypto space suggest a potential recovery.
For now, ETH needs to hold critical support levels and prove its resilience against growing competition. Investors should watch key price levels, ETF trends, and staking demand to gauge the next move. While uncertainty remains, one thing is clear—ETH’s next few months could define its long-term trajectory in the crypto landscape.
Read more: Will ETHER reclaim $4,800 and $6,000 amid Ethereum’s struggles?
Victor Solomon is a crypto analyst at Crypto Asset Buyer (CAB). Over the years, Victor has gained valuable expertise in market analysis, risk management, and community management within the cryptocurrency ecosystem. The founder of Soluvic Crypto Hub, a crypto community where he equips newbies in the space, Victor’s mission is to empower individuals to uncover opportunities and safely navigate risks in the blockchain industry. Victor’s academic foundation includes a BSc. (Ed) in Mathematics, a credential that underpins his strong analytical and problem-solving abilities. Currently, he is expanding his technical expertise as a Software Development student at Brigham Young University. He is an Ex African Manager of Newscrypto.
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