Ethereum (ETH) consolidated near $3,400 on Tuesday, set to end the year with approximately 50% profit. Ethereum has delivered negligible gains compared to Bitcoin and most altcoins ranked in the top 20 by market capitalization. The narrative may change in 2025 with catalysts such as the upcoming Ethereum upgrade, accumulation by institutional investors, and other market drivers.
Ethereum Prepares for Pectra Upgrade in 2025
Ethereum could see an increase in scalability, security, and user experience with the upcoming Pectra upgrade, expected to launch in 2025. The upgrade will introduce improvements in account abstraction, validation processes, and network performance.
The goal is to improve the experience of both users and developers on Ethereum and to make future scalability upgrades easier to implement.
Validator stake limits, withdrawal of staked funds, and reasonable smart contract development could enhance the efficiency and security of the Ethereum network. This could create a domino effect for Layer 2 chains that rely on Ethereum for their security infrastructure.
Pectra will be the third major upgrade in the Ethereum ecosystem after the Merge, and successful implementation could serve as a catalyst for Ether's recovery in 2025.
Ethereum analyst Anthony Sassano estimates that the Pectra upgrade will launch in March or April next year. Notably, Unichain, an Ethereum-based protocol, is expected to launch its mainnet in early 2025, aiming to utilize blobs, and Pectra's improvements could help Ethereum meet Unichain's scalability requirements.
Institutional Investors Accumulate Ether During Recession
The on-chain data intelligence platform Santiment shows stable increases in two key metrics: supply held by the top non-exchange addresses and the top addresses of tokens as a percentage of total supply. The increase in these metrics in November and December indicates that large wallet investors are accumulating Ether.
Data from Lookonchain shows that organizations like World Liberty Financial, backed by Donald Trump, have purchased Ether tokens during the ETH price decline. As the supply of Ether held by large organizations outside of trading platforms increases, this signals accumulation by whales, a metric often indicative of bullish trends for ETH.
U.S. Spot Ethereum ETFs Could Transfer Staking Yields
While some spot Ethereum ETFs in the U.S. have been approved by the SEC, none currently include staking yields. The regulator has opposed all ETF proposals that include staking, unlike proposals in Switzerland and Canada.
Cryptocurrency-friendly regulations under President-elect Donald Trump could pave the way for investors to increase their profits through ETH staking rewards. ETF issuers could benefit from staking rewards through increased NAV, reduced management fees, and dividends.
A report from Bernstein Research indicates that under the cryptocurrency-friendly Trump administration, the SEC is likely to approve staking yields for Ethereum ETFs.
Higher Adoption Rates Among Organizations, Beyond Utility of Notification Tokens
Dario Lo Buglio, CTO at Brickken, told Crypto.news in an exclusive interview:
"One thing everyone should remember about Ethereum is that it does not only have financial use cases like Bitcoin; it also has smart contracts. It can be used to program applications and must strike a balance between Ethereum's value and its utility as a form of payment and decentralized applications.
"I don't think there is a price delay. I think there is a delay in positive development. And that's because this is the largest decentralized blockchain, so it takes time to implement changes, unlike Solana and other protocols that can upgrade without trouble."
Lo Buglio remains optimistic about Ethereum's adoption by institutions due to its smart contract functionality and underlying technology.
Technical Analysis and Targets
Ethereum hovered around $3,400 on December 31. The coin faces resistance at $3,497 and finds support in the fair value range between $3,159 and $3,257. On the daily ETH/USDT price chart, technical indicators support a bullish outlook for Ether.
The relative strength index is 46 and trending upward, indicating positive underlying momentum. The moving average convergence divergence shows shorter consecutive bars, suggesting that negative momentum may be weakening. Traders should closely monitor the potential for a price trend reversal for Ethereum.
Ether's target is $4,500, with a key psychological support level at $3,000, as shown on the daily ETH/USDT price chart. Disclosure: This article does not represent investment advice. The content and materials on this page are for educational purposes only.
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