Can Ethereum Make a Comeback? Analyzing Its Recent Performance and Future Prospects

In recent months, the performance of Ethereum has sparked widespread attention in the cryptocurrency community. From price trends to market dominance, and community sentiment, this top cryptocurrency seems to be experiencing a period of stagnation. However, in the past few days, there have been signs of a rebound for Ethereum. Let us delve into the reasons behind its prolonged slump and whether the current momentum can drive its recovery.

The Dilemma of Ethereum

Since December 2024, Ethereum's performance has been less than satisfactory. Whenever market sentiment changes and leads to an overall decline, Bitcoin often manages to rebound and reach new highs, while Ethereum struggles to return to its previous levels.

A review of Ethereum's market performance in recent months:

• November 2024: Market rises, Bitcoin approximately $96,405, Ether $3,703.
• December 1, 2024: Slight pullback, Bitcoin at $93,557, Ethereum at $3,337.
• January 1, 2025: Bitcoin slightly rebounds to $94,500, while Ethereum further declines to $3,298.
• February 1, 2025: Bitcoin plummeted to $84,381, Ether fell to $2,236.

It is worth noting that even when Bitcoin rebounded from its February low to $94,304 in April, Ethereum still failed to retest its previous highs. The BTC/ETH ratio continues to widen, highlighting the performance gap between the two.

As of the time of writing, the trading price of Ethereum is approximately $2,400. Considering its recent performance, this is a decent increase. However, it has not yet broken through the higher price range. So, what challenges does the Ethereum market actually face? Let's analyze a few key factors.

Bitcoin and Meme Coins Diversifying Attention

In recent months, Bitcoin and Meme coins have become the focus of the market. The news of the U.S. government's plan to establish a Bitcoin reserve has sparked heated discussions among investors, and several state governments are also advancing strategic Bitcoin reserve plans. Texas and New Hampshire have made progress in this area, and other states, as well as some countries, are following suit.

This level of sovereign interest has further attracted the attention of institutional investors. A well-known publicly listed company recently announced an increase in its Bitcoin holdings, solidifying its position as the publicly listed company with the most Bitcoin, currently holding over 555,000 Bitcoins.

At the same time, meme coins have also diverted market attention. One of the most successful meme coins of 2025, Fartcoin, has a market cap of over $1 billion and was launched on a competing chain. The popular meme coin issuance platform PumpFun also chose this competing chain. In fact, most of the hottest meme tokens created at the end of 2024 and in 2025 come from the PumpFun platform.

In contrast, Ethereum seems to have missed this wave of excitement. Additionally, the decentralized finance (DeFi) sector lacks significant innovations, and the level of discussion has noticeably decreased. Overall, Ethereum is not at the center of any notable hotspots and lacks catalysts to drive price increases.

Liquidity Dispersed to Subnetworks

The high Gas fees of Ethereum have always been a major obstacle to its growth. Worse still, multiple layer-two network solutions have emerged on the Ethereum network, such as some well-known scaling solutions. These layer-two networks compete with Ethereum for liquidity. Due to the widespread use of USDC, these networks do not require much ETH to perform operations. More importantly, these layer-two platforms support a variety of activities, reducing the demand for transactions through the Ethereum main chain. Therefore, even in cases of high on-chain usage, the demand for ETH has not risen as expected.

The Rise of Competitive Networks

Some competing chains provide developers and users with a better experience, further weakening Ethereum's market dominance. These competing chains offer faster, cheaper, and more powerful services, naturally attracting more developers and retail investors. Here are some reasons why certain competing chains stand out:

1. Higher performance and scalability: A competing chain can process up to 3,000 transactions per second, theoretically even reaching 65,000 TPS, far exceeding Ethereum's processing capability of 15 transactions per second.
2. An active and supportive ecosystem: Providing developers with abundant resources, tools, and funding opportunities to facilitate the seamless emergence of new projects.

In addition, other Layer-1 platforms have also made progress in institutional adoption, further weakening Ethereum's dominant position.

Limited Institutional Interest

Compared to Bitcoin, Ethereum's appeal among institutional investors is relatively limited. There are few publicly traded companies holding Ethereum, with a total value of less than $500 million, while Bitcoin's figure exceeds $50 billion.

The crypto ETF market also shows a huge gap between the demand for Bitcoin and Ethereum. Although the Ethereum spot ETF has recorded billions of dollars in inflows, its scale still lags far behind that of the Bitcoin ETF. This indicates that Bitcoin, with its first-mover advantage and widely accepted store of value function, is more favored by large investors.

The Hope of Ethereum: Can It Make a Comeback?

Ethereum needs a significant breakthrough to regain market dominance, attract widespread investment, and achieve a surge in value. Recently, Ethereum just activated a network upgrade. This is a positive development, but it has not fully addressed the challenges of asset and data bridging within the Ethereum Layer 2 ecosystem. Certain competing chains still maintain an advantage as users can seamlessly switch between multiple decentralized applications (DApps).

Nonetheless, this upgrade seems to have a positive impact on the price of Ethereum, with a 20% increase in the past 24 hours, reaching $2,400. Will this rebound be sustainable, and can Ethereum return to its peak? We need to patiently observe the actual improvements brought to the Ethereum chain by the recent upgrade, and whether these improvements are sufficient to get ETH back on a competitive track. The market performance in the coming months will be a key indicator that determines whether Ethereum can regain its glory and re-establish its leadership position in the cryptocurrency world.