The long-standing 'number two' Ethereum seems out of place in this bull market. Compared to the strength of cryptocurrencies like Bitcoin and SOL, ETH has been hovering around $3,000 without progress. Additionally, the foundation's frequent selling of tokens has triggered strong dissatisfaction within the community, and market confidence in ETH appears to be wavering. Coupled with the hidden costs of the Layer 2 war and the siphoning effect of the Solana Meme economy, Ethereum's future path seems increasingly unclear amidst various controversies.
EF's frequent selling of tokens 'damages goodwill'.
The Ethereum Foundation (EF) has been intermittently selling ETH, and recently sold 100 ETH worth approximately $307,893. Data from blockchain analytics firm SpotOnChain shows this is the foundation's third ETH sell-off in 2025.
In January of this year, the EF sold a total of 300 ETH (as of data on January 27), worth approximately $981,200. Market observers noted that the foundation's sell-off has put pressure on Ethereum's price. As of the time of writing, ETH is trading slightly above $3,000, with a 30-day decline of over 7%.
However, the Ethereum Foundation still holds a large reserve of ETH. According to Arkham Intelligence, the foundation owns 269,175 ETH, worth approximately $817 million.
Ethereum's on-chain activity is clearly lagging behind other competing chains.
According to DappRadar data, Ethereum's on-chain trading volume dropped 38% to $36.5 billion over seven days.
In contrast, activity on BNB Chain surged by 112%, while Solana grew by 36%.
According to data from DefiLlama, between January 14 and January 21, Ethereum generated only $46 million in fees. In contrast, Solana charged $71 million in fees, and when including contributions from Raydium, Jito, and Meteora, the total for the same period reached $309 million.
Ethereum L2: The 'splitting' behind the boom, criticized as a 'band-aid'.
As ETH shows weakness, the Ethereum Foundation is facing severe challenges, with calls for innovation and internal restructuring growing louder. The rise of competing blockchain networks like Solana has intensified the necessity for Ethereum to enhance its capabilities and innovate within its ecosystem to maintain its competitive edge.
The emergence of Layer 2 solutions such as Optimism and Arbitrum has alleviated congestion and high gas fees on the Ethereum mainnet. However, competition among these Layer 2s has intensified, highlighting the issue of ecosystem fragmentation.
Michael Egorov, founder of the decentralized exchange Curve Finance, criticized in a report that L2 is 'more like a band-aid... and a temporary solution, rather than a foundation for building sustainable strategies.' He emphasized that the Rollup roadmap hinders composability and leaks most of ETH's value to L2 tokens and their operating companies.
Ethereum Foundation's Justin Drake called on X last weekend: 'Enable native Rollup technology to end the era of Layer 2 fragmentation.'
Cryptocurrency research and investment firm Paradigm also called for reform. The firm believes Ethereum's current annual upgrade plans limit its innovation capabilities and its ability to effectively respond to market trends. Paradigm stated: 'Accelerating Ethereum's development will enable more people to enjoy the convenience of permissionless innovation, helping to pave the way for a truly globalized, minimal-trust financial system.'
Facing increasing pressure, the Ethereum Foundation announced plans to allocate 50,000 ETH (approximately $165 million) to support its decentralized finance ecosystem.
Ethereum co-founder Vitalik Buterin stated that the foundation is indeed making 'significant adjustments' to its leadership to improve transparency and better support developers.
Technical analysis: The battle between key support and market sentiment.
The saying goes, 'The boatman seeks the sword,' February and March have historically been bullish for ETH.
Coinglass data shows that for the past six consecutive years, ETH has shown an upward trend in February, with the largest increase occurring in 2024, when it rose from $2,280 to $3,380 by the end of the month, an increase of over 46%. March has historically also been a favorable period for ETH. In the last nine years, seven years have seen increases in March, while April has seen increases in six years.
Engineer and analyst Wolf stated on January 26 on X: 'With eight years of analyst experience, I can confidently say I've never seen a chart as strong as ETH's; the potential here is unparalleled. This is the best asymmetric bet you can make.'
Technical analyst Rakesh believes that ETH/USDT could drop to $2,850, which may become a strong support level. If the price rebounds from $2,850 but falls below the 20-day moving average ($3,308), it would indicate that bears are selling on the highs. This increases the risk of dropping below $2,850. If this happens, the trading pair could fall to $2,400.
Time is running out for bulls; if they want to stop the decline, they must push the price back above the 50-day moving average ($3,455), after which ETH/USDT may continue to rebound to $3,745.
In summary, as Solana reconstructs traffic entry with Meme coins and Layer 2 becomes a value extraction machine, Ethereum's moat seems to be severely eroded. Technical advantages must be translated into ecosystem dominance, and the loss of each price support level could trigger a collapse of faith. Where Ethereum will head, time will tell us the answer.
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