Can Ethereum Return to Its Peak? An Analysis of Its Recent Performance and Future Prospects

Cryptocurrency market watchers have recently noticed the sluggish performance of Ethereum. Whether it is price trends, market position, or community sentiment, this top cryptocurrency seems to be in trouble, even failing to reach new highs in this cycle. However, in recent days, Ethereum seems to be showing signs of a rebound. Let's delve into the reasons for its long-term sluggishness and the sustainability of the current rebound.

The Predicament of Ethereum

The market performance of Ethereum is indeed concerning. Since December 2024, whenever the overall cryptocurrency market has declined, Bitcoin has always managed to quickly recover and reach new highs, while Ethereum has consistently failed to return to its previous price levels.

Reviewing the market data from the past few months: In November 2024, the price of Bitcoin was approximately $96,405, and Ether was $3,703. On December 1, the market experienced a slight correction, with Bitcoin dropping to $93,557 and Ether falling to $3,337. Although both currencies touched key price levels during the month, they were unable to maintain the upward momentum.

On January 1, 2025, Bitcoin slightly rose to $94,500, while Ethereum continued to decline to $3,298. On February 1, Bitcoin fell sharply to $84,381, and Ethereum dropped to $2,236. Although Bitcoin broke through $102,000 in late February, Ethereum failed to follow the rebound. In fact, when Bitcoin rebounded from $84,381 in February to $94,304 in April, Ethereum was still continuously declining and failed to retest its previous high. The BTC/ETH ratio continued to widen.

As of the latest data, the trading price of Ethereum is approximately $2,400. Considering its recent performance, this is a decent increase. However, it still hasn't broken through to a higher price range. So, what exactly is going on in the Ethereum market? Let's analyze a few key factors.

Bitcoin and meme coins seize market spotlight

In recent months, Bitcoin and Meme Coins have become the focus of the market. The news of the U.S. government planning to establish a Bitcoin reserve has sparked widespread discussion, and several state governments have begun to work on establishing strategic Bitcoin reserves. This trend has attracted significant attention from institutional investors.

At the same time, meme coins have also diverted market attention. One of the most successful meme coins of 2025, Fartcoin, has a market capitalization of over $1 billion and was launched on other public chains. Popular meme coin issuance platforms have also chosen other public chains. Most of the hottest meme tokens created at the end of 2024 and in 2025 come from these platforms.

As a result, Ethereum missed this wave of excitement. In addition, the decentralized finance (DeFi) sector also lacks significant innovations, and the level of discussion has notably decreased. Overall, Ethereum is not at the center of any major hotspots and lacks the momentum to drive prices up.

Liquidity is dispersed to Layer 2 networks

The high Gas fees of Ethereum have always been a major obstacle to its development. Worse still, the emergence of numerous layer two networks, such as Polygon, Optimism, Base, Linea, and Arbitrum, has further dispersed Ethereum's liquidity. These networks compete with Ethereum for users and funds. Due to the existence of stablecoins, these networks do not require much ETH to perform operations. Additionally, these platforms offer a variety of activities, which reduced transactions on the Ethereum main chain. Therefore, even with high on-chain usage, the demand for ETH has not risen correspondingly.

The Rise of Competitive Networks

Other public chains provide developers and users with a higher quality experience. Taking certain public chains as an example, they offer faster, cheaper, and more powerful network environments. According to relevant reports, the ongoing activity on these public chains reveals the reasons for attracting developers and investors:

1. Higher performance and scalability: capable of processing thousands of transactions per second, far exceeding Ethereum's processing capability.
2. An active and supportive ecosystem: providing developers with rich resources and tools to promote ecosystem growth.
3. Low cost and high efficiency: Extremely low cost when processing large transactions, making it more attractive to developers.

These competing public chains continue to grow in popularity and capability, and the increase in their institutional adoption further undermines Ethereum's market position.

Limited Institutional Interest

Unlike Bitcoin, Ethereum has failed to attract a large amount of institutional investment. According to the data, there are few publicly traded companies holding Ethereum, with a total value of less than $500 million, while the figure for Bitcoin exceeds $50 billion.

The crypto ETF market also shows a significant gap between the demand for Bitcoin and Ethereum. Despite Ethereum recording billions of dollars in inflows in spot ETFs, its figures still lag far behind Bitcoin. This indicates that Bitcoin, with its first-mover advantage and widely accepted store of value function, is more favored by large investors.

The Future of Ethereum: Can It Return to Its Peak?

Ethereum needs a significant breakthrough to regain market dominance, attract widespread investment, and achieve a surge in value. Recently, Ethereum just completed a network upgrade. This is a positive development, but it still hasn't fully addressed the challenges of asset and data bridging in the layer two ecosystem. Other public chains still have an advantage in user experience, as users can seamlessly switch between multiple decentralized applications (DApps).

Nonetheless, this upgrade seems to have had a positive impact on the price of Ethereum, with a 20% increase within 24 hours, reaching $2,400. Whether this rebound can be sustained and if Ethereum can return to its peak remains to be seen. We need to patiently observe the improvements brought to the Ethereum network by the recent upgrade and whether these improvements are sufficient for ETH to reclaim market share. Future developments will still be subject to the test of time.