Ethereum (ETH) Slow Start to 2025 Signals Tough Road for Vitalik Buterin’s Strategy

Key Takeaways

• Ethereum co-founder Vitalik Buterin says the project will try to scale the L1 and L2s in 2025.
• Data shows waning confidence in ETH, with selling pressure rising to new heights lately.
• ETH action could face resistance at$3,677, making it difficult for the price to appreciate.

A struggling cryptocurrency and a lack of momentum—these two phrases perfectly describe Ethereum’s (ETH) performance throughout most of 2024.

2025 began, and ETH seems to follow the same playbook as last year. This development has further intensified the broader market’s bearish sentiment around cryptocurrency.

It does not end there. Outside of the price action, the Ethereum Foundation also faces leadership problems. Some days back, co-founder Vitalik Buterin mentioned that he would change this.

Moments after, speculation about a second foundation emerged. Despite that, Buterin has released the Ethereum 2025 strategy. But can this plan save what is left of ETH’s price action?

Vitalik Buterin’s Ethereum 2025 Plan Faces Challenges

As of this writing, ETH’s price is $3,400. A few days ago, Tron founder Justin Sun revealed that if ETH were to reach $10,000, he would shift attention to the blockchain’s layer-1 development instead of the numerous layer-2 networks on it.

But Buterin does not seem to share the same view. According to his latest blog post, the co-founder admits that Ethereum, as well as the layer-2s, faces a lot of challenges.

Despite that, he disclosed that the Ethereum 2025 strategy would focus on scaling the Mainnet and the L2s.

In the post, Buterin mentioned that a major problem is its coordination, which has become a subject of public attention. While he admits that giving up on L2 like Justin Sun encouraged could be one way to solve the issue, he notes that it is a “shortcut” move.

Hence, the project will not follow that route. Instead, he mentioned that Ethereum would scale both the L1 and L2s in 2025.

“We should stay the course, continue to scale primarily through L2s, but make sure that L2s fulfill the promise that they were meant to fulfill. We should think explicitly about the economics of ETH. We need to make sure that ETH continues to accrue value even in an L2-heavy world, ideally solving for a variety of models of how value accrual happens,” he added.

To be fair, Ethereum still has a long way to go before it sees a bullish turnaround this year. But in the short term, that is unlikely to happen.

One indicator that supports this bias is the Mean Dollar Invested Age (MDIA). The MDIA is the average age of all coins on the blockchain weighted the purchase price.

When the MDIA rises, it means that long-term holders have refrained from releasing their assets into circulation.  However, a decline in the MDIA reading indicates that more coins are no longer stagnant, which is bullish.

As shown above, Ethereum’s MDIA has been climbing, indicating that most ETH holders have kept their coins in old wallets.

If this position is sustained, it will indicate low trading activity and dwindling confidence in the cryptocurrency’s potential.

Selling Pressure on All Fronts

Furthermore, the netflow of large holders has also decreased. This flow measures the activity of addresses that hold between 0.1% and 1% of the total circulating supply.

When the large holders’ netflow increases, it means that most addresses have accumulated more coins than the volume sold. However, in this case, the decline indicates a higher volume of ETH sold.

If this continues, the anticipated Ethereum price run toward $4,000 might become a struggle.

The Ethereum supply on exchanges, a metric that tracks the number of coins flowing into exchange wallets from external sources, also backs this thesis.

A decline in this metric suggests that holders are refraining from transferring their tokens to exchanges, indicating a lack of intent to sell.

But since Jan.20, nearly 340,000 ETH has been transferred into exchanges. At the current price, this amount is valued at around $1.15 billion, indicating that the crypto remains under significant selling pressure.

ETH Price Prediction: Trend Remains Weak

On the daily chart, the ETH price looks like it wants to break above the 0.618 Fibonacci level. Still, the Supertrend in this timeframe remains above the price.

The Supertrend is an indicator that shows whether a cryptocurrency is in an uptrend or downtrend. When the green line of the Supertrend, the asset is an uptrend, and the price can increase.

However, as of this writing, the Supertrend has flashed a red line, indicating that ETH might face resistance at $3,667, making it difficult for the price to retest $4,000.

So far, if buying pressure remains low, ETH could drop to $3,024. In a highly bearish scenario, the price could decline to $2,768.

On the other hand, if the Ethereum 2025 strategy results in increased demand for L2 tokens and ETH, this correction might not occur.

In that case, Ethereum’s price might break $4,500, possibly hitting a new high before this cycle ends.