Ethereum has underperformed in this cycle. While Bitcoin reached a new all-time high, ETH did not follow suit, while ETH/BTC has fallen 80% since 2022.
A key turning point in Ethereum’s performance was the Dencun upgrade, which significantly reduced transaction costs for Layer-2s but had the unwanted effect of doing the same for Ethereum revenue and made ETH inflationary.
This article will analyze Ethereum’s underperformance, explain why the price has fallen, and discuss what we can expect in 2025.
The weekly time frame chart shows the ETH price has fallen 60% since its cycle high of $4,109 in December 2024.
In addition to the sharp decline, the price of Ethereum broke down from a nearly 1,000-day ascending support trend line in March 2025.
Ethereum fell to a low of $1,383 in April, briefly falling below the $1,550 horizontal support area. However, the price has bounced since (green icon).
Despite the bounce, technical indicators are firmly bearish. The Relative Strength Index (RSI) and Moving Average Convergence/Divergence (MACD) are falling.
Moreover, the RSI is below 50 while the MACD is negative, both signs of a bearish trend.
The weekly time frame suggests that Ethereum’s long-term trend is bearish. While short-term bounces toward the trend line could occur, the long-term trend is likely bearish.
Is Ethereum Overvalued?
Garrison Yang, Co-Founder of the Web3 development studio Mirai Labs, argues that Ethereum remains overvalued despite its recent underperformance.
Yang states that Ethereum no longer functions effectively as an asset or a store of value.
The Layer-2 ecosystem accrues all the value, while Ethereum does not benefit. Nothing illustrates this better than a revenue comparison between Base and Ethereum.
In the past year, Base has a revenue of $82.7 million but pays only $5 million to Layer-1, for a ratio of only 5$.
This ratio was very different before the Dencun upgrade. For example, Arbitrum, which had most of its activity before, has total revenues of $152 million and paid $95 million to Ethereum, for a ratio of 62.5%.
Also, revenues have dropped since the upgrade (white circle), but they rebounded in 2025, likely due to increased transactions.
However, the rent paid to Layer-1 has not and is nearly non-existent (red circle).
Yang also expects Ethereum’s Exchange-Traded Product (ETF) to continue underperforming.
Tradfi is still wrapping their heads around the BTC ETF, a new phenomenon among those who aren’t crypto native. Dropping in another ETF for ETH, which has significantly less awareness than BTC, was always going to yield smaller inflows and interest.
The 2% yield on staking combined with Ethereum’s underperformance has also reduced Ethereum’s investor appeal.
Regarding the broader market trend, Yang suggests that Altseason already took place in 2023/2024, with assets like Solana increasing over 10x and even more pronounced gains on memecoins.
However, he believes the traditional four-year cycle concept is over, and future price trends will be less predictable and formulaic.
Finally, Yang suggests that Ethereum’s best chance of becoming relevant is if traditional finance selects it as the go-to chain for stablecoins and Real-World Assets.
Can ETH Price Bounce?
The daily time frame chart shows that the Ethereum decline is contained in a descending parallel channel, a positive sign since these channels usually contain corrective movements.
The price of ETH bounced on April 9, creating a bullish, engulfing candlestick (green icon) at the channel’s support trend line.
However, technical indicators are still bearish, and short-term readings cannot predict a bullish trend reversal.
Moreover, even in the case of a bounce, the Ethereum price has to clear a critical resistance level to confirm its trend reversal.
Disclaimer:
The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
Valdrin Tahiri is a cryptocurrency analyst and reporter at CCN, specializing in technical analysis with a focus on Elliott Wave theory, on-chain metrics, and fundamental research. He brings over seven years of experience in the crypto space as both a trader and writer.
He discovered cryptocurrencies in 2017 while earning his MSc in Financial Markets at the Barcelona School of Economics, which sparked a deep interest in blockchain and market dynamics. Since then, he’s contributed to top crypto outlets like BeInCrypto and CoinGape.
Valdrin also served as Community Manager of BeInCrypto’s Telegram group for three years, helping grow it into one of the largest crypto communities worldwide. His expertise in market structure and price patterns allows him to break down complex trends into clear, actionable insights.
He’s published thousands of articles covering altcoins, Bitcoin cycles, and macro trends.
