This time, we won't talk about sentiment, only judgment.
Author: Biteye
ETH/BTC has hit a five-year low, the old ecosystem is leaving, and the new narrative is not coming—Ethereum is stuck in the middle ground of technical upgrades and value dilution.
The E-Guard is still talking about ideals, but reality is liquidating faith.
This time, we won't talk about sentiment, only judgment: Is ETH still worth holding? What are the long and short positions betting on?
1. Bullish Camp: Stable Moat + Technical Dividend + Macro Favorable
Although Ethereum's price has not yet soared, the bullish view believes that ETH's long-term value is still gradually accumulating. The ecological fundamentals are solid, technical upgrades are progressing, and macro expectations are gradually improving, providing triple support.
Ethereum remains the absolute center of underlying infrastructure: Bitwise CIO @Matt_Hougan points out that the three major trends of stablecoins, tokenization, and AI Agents are all dominated by ETH. As long as Ethereum achieves a better user experience through Layer 2 without losing its original position in the minds of institutions, the outlook is very optimistic, leaning towards a bullish attitude. Saul Rejwan, an executive partner at Masterkey, predicts that once policies are relaxed, ETH will be the first beneficiary of DeFi and DePIN. @BTW0205 believes that although the short-term outlook is bearish, in the medium to long term, Ethereum still possesses ecological inertia and system-level advantages. As long as it can reconstruct the value model and promote the new narrative, there is still a possibility of a comeback.
Technical upgrades continue to release structural dividends: The Prague/Electra upgrade is imminent, and Rollup performance improvements will make ETH faster, cheaper, and more open. Lower gas fees attract more users back and strengthen the essential demand for ETH usage. Bulls believe the market has not yet priced in these structural optimizations. @binji_x also believes that the prototype of the "Ethereum Super Chain" is emerging, which is expected to open up new growth spaces.
Signals of ecological structural adjustment: @feifan7686 believes that Ethereum is shifting from a technology-driven to a capital and ecology-driven development path. The Pectra upgrade adjusts ETH attributes, cross-chain testing alleviates performance shortcomings, and oracle layouts compete for pricing power, all of which are part of a systematic "self-rescue" around capital structure and ecological discourse power. Although it may be difficult to reflect this immediately in prices, the direction is clear, leaning towards bullish.
Secondary traders claim "ETH is undervalued": Well-known crypto analyst @rovercrc and prominent trader, former BitMEX CEO @CryptoHayes have both published articles pointing out that ETH is undervalued by the market. Hayes even predicts that ETH will lead SOL to rise to $5,000. Although such views are aggressive, they reflect that mainstream traders are re-evaluating ETH's valuation space.
Macro liquidity-driven impact: @0xVeryBigOrange believes that regardless of how many technical routes or ecological discussions surround Ethereum, the fundamental reason for the current price stagnation is only one—macro liquidity has not yet been released. It's not that ETH is not good; the entire market has not yet entered a "liquidity release cycle."
Potential opportunities in bull market rotation: The lack of ETH's rise does not mean there are no opportunities; rather, the rotation has not yet reached it. With expectations of interest rate cuts and ETF progress, ETH has the potential to return from the margins to the center. DigitalCoinPrice estimates that in an optimistic scenario, it could reach $7,000 by the end of the year, and potentially see $47,000 by 2030.
TVL remains first, on-chain funds still heavily invested in ETH: Ethereum currently has a TVL of $49.85 billion, accounting for more than half of the entire DeFi market. Although Solana and Tron have performed well, in terms of "on-chain savings," ETH remains the most stable pool.
Lower inflation rate, supply model superior to BTC: ETH's annual issuance is only 0.5%, far lower than BTC's 0.83% (66% faster than ETH). This view emphasizes that Ethereum's inflation rate is much lower than Bitcoin's, making its monetary model more sustainable.
Developer ecosystem scale leads: Venture capital firm Electric Capital released an annual report stating that ETH has 65% of the global on-chain developer innovation activity, with over 6,200 active developers each month, and L2 developers growing at an annual rate of 67%. These data indicate that Ethereum still occupies a core position in the developer community.
Foundation reform enhances governance expectations: Vitalik announced a reorganization of the foundation to improve the efficiency of technical decision-making and enhance transparency. For a systemic asset like ETH, an upgrade in governance structure means increased long-term certainty.
In summary, the bulls believe that Ethereum is the value reservoir of Web3, laying the technical groundwork for the next decade, and short-term prices are not the core concern.
2. Bearish Camp: Erosion of Faith + Ineffective Value Capture + Route Disputes
The core view of the bears is: the times have changed, and ETH is lagging behind competitors in terms of growth, structure, efficiency, and narrative. The technical route has not translated into token value, and the ecosystem is facing fragmentation.
From an institutional perspective, ETH may not have bottomed out: @jason_chen998 believes that Ethereum's fundamentals have become ineffective, and the only current positive is ETF staking. However, core institutions like BlackRock have not yet acted, reflecting that they are still suppressing prices to accumulate, indicating that ETH may not have bottomed out. Overall, the outlook is bearish.
ETH ecosystem has lost its growth engine: @Loki_Zeng believes that the Ethereum ecosystem will completely stall by Q1 2025, with significant declines in on-chain data. Traditional sectors (DeFi, L2, NFT) are almost stagnant, and new hotspots (AI, Meme) are unrelated to ETH. The once-promising ETF staking benefits are not attractive enough, making it difficult for large funds to accept low returns and high-cost allocation logic. Overall, ETH lacks substantial growth momentum, leaning towards bearish.
RWA narrative disillusionment, Ethereum may not be the optimal solution: @yuyue_chris questions Ethereum's actual capability in the RWA track. Although ETH has long been seen as a "safe carrying layer" for RWA assets, its weak price and the liquidation risks caused by the PoS mechanism are undermining its credibility as an RWA foundation. Overall, Ethereum's ability to carry global-level RWA is in doubt, and the supporting role of the RWA narrative is overestimated, leaning towards bearish.
On-chain growth slowing: Researcher @wsy2021111 from @PANewsCN mentioned in a December 2024 review that ETH mainnet user growth has stagnated over the past year, with many new users opting for L2 or new chains like Solana. In his view, Ethereum is transforming into a "value reservoir for large holders," while ordinary small users and emerging popular applications prefer chains with lower fees and faster speeds. This view highlights the pressure Ethereum faces in user growth.
Supply entering inflation state: Due to the continuous decline in network transaction fees, Ethereum's daily burn rate has dropped to a historical low. This has significantly reduced the expected burn rate of ETH, leading to an annual increase in supply of about 0.76%, or approximately 945,000 new ETH each year. Now, Ethereum's overall supply has exceeded pre-merge levels.
ETH/BTC ratio hits a five-year low: On March 31, analyst James Van Straten reported that the ETH to BTC exchange rate fell to 0.02193, a five-year low. In the context of BTC halving and new L1 rotations, ETH has become "the least rising mainstream coin," with funds gradually flowing out and faith wavering.
Emergence of new public chains like Solana intensifies ETH competition: Solana offers a lighter user experience and a more vibrant cultural atmosphere, attracting a large number of incremental users and developers. Chains like Base and Sui are experiencing active growth, while the ETH mainnet is gradually becoming a stronghold for institutions and traditional projects, losing its appeal to younger projects.
Questioning the technical route: is it empowering or undermining value?: Investor John Pfeffer states that the current technical route Ethereum is pursuing benefits users but is bearish for token value. Layer 2 scaling and PoS transformation will reduce congestion and fees on the main chain, which, while improving on-chain experience, decreases the consumption of ETH per transaction.
Core applications flowing out: By the end of 2024, there were rumors in the industry that Uniswap plans to launch an independent chain. Uniswap is the largest source of ETH gas, accounting for over 14%. If it migrates chains, ETH will lose hundreds of millions of dollars in fees each year and will also lose an important source of burning, increasing the risk of ecological siphoning.
Foundation accused of high-level cashing out, governance trust questioned: The Ethereum Foundation was reported to have sold at a high point by the end of 2024, sparking speculation of "internal bearishness." Issues such as low governance efficiency and slow scaling have compounded, causing the community to lose confidence in future development.
Community route divisions are evident: Base leader Jesse Pollak and core developer Dankrad Feist have fundamental disagreements on the degree of reliance on the mainnet versus L2, leading to unclear routes and decreased execution efficiency. Although Vitalik has spoken out, there is a lack of overall direction and strategic wavering.
In summary, the core logic of the bears is: Ethereum is in a dilemma of technological advancement and price stagnation, while the focus of the ecosystem, narrative power, and user growth are quietly slipping away.
3. So, what judgment should be made now?
Based on the above bullish and bearish factors, we can conduct a comprehensive analysis from the perspective of holders' mentality and decision-making:
1. Long-term value-focused holders
If you believe that ETH represents the foundational layer of future crypto, with the broadest developer base, the strongest DeFi ecosystem, and a continuously evolving technical route, and that developers, funds, and structural narratives have not collapsed, it is still the core carrying chain for new narratives (DePIN, AI Agent, RWA). In this case, holding or even gradually increasing your position while waiting for the next cycle is a logical choice.
2. Short to medium-term profit-focused holders with high risk aversion
At this moment, moderately reducing ETH positions may be more in line with strategy. After all, the many positives mentioned above are more likely to gradually manifest in the medium to long term, while ETH may continue to fluctuate or even weaken in the short term. The competitive landscape and value dilemma mentioned in the bearish arguments are not issues that can be resolved in just a few quarters.
At this time, consider reducing positions, keeping a flexible base position for adjustments, and waiting for ETH's trend to clarify before adding to your position. You can also consider moderate swing trading to enhance capital efficiency. A neutral strategy could involve retaining a portion of the base position (to avoid missing potential surges) while using another portion of funds for swing trading or allocating to other assets to hedge the opportunity cost of holding ETH.
3. Holders concerned about short-term performance and certainty, or who have doubts about Ethereum's route
Being moderately cautious is also a wise choice. You might consider gradually liquidating most of your position during a rebound while continuously monitoring key indicators of the Ethereum ecosystem (such as on-chain activity). If there are significant signs of improvement in the fundamentals in the future, or if a new narrative emerges, you can adjust your position in a timely manner.
Risk Warning: The above is for information sharing only and is not investment advice.
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