Is the Ethereum rebound a flash in the pan?

Written by: Isaac Olatunji

Compiled: Vernacular Blockchain

Unless you are living in isolation, almost no one in the cryptocurrency space has failed to notice the decline of Ethereum over the past few months. Price trends, market dominance, and community sentiment—pick any one of them, and they are all at historical lows! This top cryptocurrency seems to be plummeting significantly—this cycle hasn't even reached a new all-time high. However, in the past few days, Ethereum appears to be rebounding. Why has it performed poorly for several months? Can the current momentum drive it to recover?

The Predicament of Ethereum

Ethereum is struggling, there is no doubt about it. Since December 2024, whenever a shift in market sentiment leads to a decline in the overall crypto market, only Bitcoin has been able to rebound to previous price levels and break through, while Ethereum has almost failed to return to its original point after a drop.

The following is the market performance of Ethereum in recent months. In November 2024, the market was in an upward phase, with Bitcoin priced at approximately $96,405 and Ethereum at $3,703. On December 1, 2024, the market experienced a slight decline, with Bitcoin dropping to $93,557 and Ethereum to $3,337. Although both top cryptocurrencies reached significant price levels later that month, they failed to maintain the upward momentum and declined again.

On January 1, 2025, about a month later, the price of Bitcoin was $94,500, slightly higher than the previous month, while Ethereum further declined to $3,298. By February 1, price data showed that Bitcoin had dropped significantly to $84,381, and Ethereum fell to $2,236. Later that month, Bitcoin reached $102,000, but Ethereum failed to bounce back to its previous highs. In fact, when Bitcoin rebounded from $84,381 in February to $94,304 in April, Ethereum continued to decline, unable to retest its prior highs. In reality, the BTC/ETH ratio has widened, as shown in the chart data.

Source: CoinMarketCap

As of the time of writing, the trading price of Ethereum is approximately $2,400. Considering its performance over the past few months, this is a decent increase. However, it has yet to break into higher price ranges. What exactly is wrong with the Ethereum market? Let's analyze a few key points.

Bitcoin and meme coins steal the spotlight

In recent months, Bitcoin and Meme Coins have taken the spotlight. You may have heard about the news that the US government plans to establish a Bitcoin reserve. This plan is widely discussed among retail and institutional investors, and many state governments in the US are also working to establish strategic Bitcoin reserves. Texas and New Hampshire have made progress in this area, as have other states in the US and some other countries.

The interests of sovereign countries have further attracted the attention of market whales and institutional investors. Recently, Michael Saylor ( announced that Strategy), formerly MicroStrategy(, has added to its Bitcoin purchases to solidify its position as the publicly traded company that holds the most Bitcoin. Out of a total supply of 21 million Bitcoin, Strategy holds more than 555,000 Bitcoin.

While Bitcoin occupies the center stage and overshadows Ethereum, meme coins are doing the same thing. Unfortunately, these meme coins were not launched on the Ethereum chain. One of the most successful meme coins in 2025, Fartcoin, with a market capitalization of over $1 billion, was launched on the Solana chain. The popular meme coin issuance platform PumpFun is also on Solana. You may not have noticed, but most of the hottest meme tokens created at the end of 2024 and in 2025 come from PumpFun.

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Source: CoinMarketCap

Therefore, Ethereum has clearly missed this wave of excitement. Additionally, discussions about decentralized finance )DeFi( have also significantly decreased, as there have been no major innovations. Overall, Ethereum is not at the center of any significant craze—there's nothing to drive its price up.

Liquidity Flow Subnetwork

The high Gas fees of Ethereum have always been a major obstacle to its growth. Worse still, the Ethereum network is flooded with Layer-2 networks like Polygon, Optimism, Base, Linea, and Arbitrum. These Layer-2 networks compete with Ethereum for liquidity. With the presence of USDC, these networks can operate without needing too much ETH. Not to mention that various activities can take place on these Layer-2 platforms, which reduces transactions through the Ethereum main chain. Therefore, if the on-chain usage is high, the demand for ETH should have risen, but that is not the case now.

Competitive Network

We have briefly mentioned how competitors like Solana are undermining Ethereum's market dominance. The fact is, Solana provides a better experience for developers and users. Who wouldn't want a faster, cheaper, and more powerful chain? According to CoinGecko's report on Solana, the ongoing activity on the Solana chain reveals why it continues to attract more developers and retail investors. Here are some highlighted reasons:

Higher performance and scalability: Solana can process up to 3,000 transactions per second, theoretically even reaching 65,000 TPS. In any case, Ethereum's processing capacity of 15 transactions per second is completely incomparable. Given Solana's extremely low costs for processing large transactions, it's obvious why developers prefer it. Active and helpful ecosystem: The Solana ecosystem provides developers with abundant resources and tools, facilitating its growth. The Solana ecosystem offers developer toolkits and funding opportunities that allow new projects to emerge seamlessly. Similar to Solana, Avalanche is also growing in popularity and capability. The institutional adoption of these Layer-1 platforms will further weaken Ethereum's dominance. Hyperliquid and Tron have made progress in perpetual futures trading and the stablecoin market, respectively.

Limited Institutional Interest

While global companies, market giants, and countries continue to accumulate Bitcoin, the situation for Ethereum is starkly different. According to CoinGecko data, there are very 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 shows a significant gap between the demand for Bitcoin and Ethereum, with the latter failing to record high inflows like the former. ETF inflow data indicates that Bitcoin, benefitting from its first-mover advantage and widely accepted store of value function, has attracted substantial investments from large investors. In contrast, although Ethereum has recorded billions of dollars in the spot ETF, its figures still lag far behind Bitcoin.

The Hope of Ethereum: Will It Make a Comeback?

Ethereum needs a wake-up call to regain market dominance, attract widespread investment, and achieve a surge in value. At the time of writing, Ethereum has just activated an upgrade. This is a welcome development, but it does not address the challenges of asset and data bridging within the Ethereum Layer-2 ecosystem. Competitors like Solana still hold an advantage as users can seamlessly switch between multiple decentralized applications )DApps(. Nevertheless, this upgrade seems to have had a positive impact on Ethereum's price, which has risen by 20% in the past 24 hours, reaching $2,400. Will this top altcoin make a comeback this time? We must be patient and observe how much improvement the recent upgrade can bring to the Ethereum chain, and whether it is enough for ETH to get back on track!