Ethereum’s Current Price: $1,900
- Analysts from a prominent bank, led by Geoffrey Kendrick, have lowered their price outlook for Ethereum in 2025.
- The new prediction sees Ethereum’s target for 2025 decrease from $10,000 to $4,000.
- To escape its current range-bound movement, Ethereum must break through a significant descending trendline resistance.
In the Asian trading session on Tuesday, Ethereum (ETH) hovered just under $2,000, following an update on the bank’s expectations for ETH’s 2025 price from Geoffrey Kendrick, the Global Head of Digital Assets Research. The UK financial institution now anticipates Ethereum will reach $4,000, marking a notable downward adjustment from the previously estimated $10,000.
Revised Ethereum Price Outlook for 2025
The bank’s analysts indicated that Ethereum may struggle to achieve the $10,000 milestone in 2025 due to the increasing influence of Layer-2 solutions on its valuation.
In a note to investors, Kendrick disclosed the bank’s revised Ethereum price projections after the cryptocurrency experienced multi-month lows, dropping below $2,000.
Ethereum is now expected to rise to $4,000 by 2025 instead of the formerly anticipated $10,000.
Kendrick also foresees a continued decline in Ethereum’s market cap until late 2027. Although recovery is possible, the analysts pointed out that long-term prospects suggest a continued downward trend in market cap.
The primary factor contributing to this pessimistic forecast is the impact of Ethereum’s Layer-2 networks on its efficiency and price. Kendrick remarked that Ethereum has “commoditized itself” as it gradually loses ground to Layer-2 solutions on its blockchain. The ongoing diversion of transaction fees from Layer-1 to L2s has resulted in a decline in its price.
The Base blockchain from Coinbase emerged as a significant point of reference for Kendrick when discussing Layer-2 solutions. He noted that Base alone has drained around $50 billion from Ethereum’s market capitalization.
Kendrick explained that when transactions are conducted on these Layer-2 platforms instead of the main Ethereum network, transaction fees are redirected to external parties like Coinbase rather than Ethereum validators. Consequently, Ethereum earns fewer fees.
This drop in fee revenue negatively impacts ETH’s price since it diminishes the economic activity on the Ethereum blockchain. As fee incomes diminish, Ethereum may need to revise its issuance model to meet operational costs, potentially putting further downward pressure on its value, according to the bank.
Kendrick suggested that Ethereum could combat this trend by instituting fees on Layer-2 networks. However, he expressed doubt about the feasibility of such a strategic shift.
“The solution would be to tax Layer-2 super-profits similar to how governments sometimes impose super taxes on foreign-owned mining firms that generate excess profits. Unless such measures are implemented, the ETH-BTC ratio will likely continue to decline,” Kendrick stated.
Ethereum Price Prediction: ETH Continues to Consolidate
According to Coinglass data, Ethereum experienced $30.21 million in futures liquidations over the past 24 hours, with long liquidations totaling $15.77 million and short liquidations reaching $14.25 million.
The popular altcoin has extended its consolidation phase into a second week, struggling to reclaim the crucial $2,000 psychological level and break above a key descending trendline resistance.
ETH/USDT daily chart
If the consolidation continues, ETH could risk falling below $1,750, testing the pivotal support level at $1,500. Conversely, to reverse the bearish sentiment, ETH must surpass the descending trendline resistance and maintain it as support.
The Relative Strength Index (RSI) and Stochastic Oscillators (Stoch) remain underneath their neutral levels, indicating prevailing bearish momentum.
A daily close above $2,200 would invalidate the bearish perspective and could potentially propel ETH toward $2,800.
Frequently Asked Questions about Ethereum
Ethereum is an open-source, decentralized blockchain that facilitates smart contract functionality. Its native currency, Ether (ETH), ranks as the second-largest cryptocurrency and the top altcoin by market capitalization. The Ethereum network is designed for developing crypto solutions, including decentralized finance (DeFi), GameFi, non-fungible tokens (NFTs), and decentralized autonomous organizations (DAOs).
Ethereum serves as a public decentralized blockchain technology that enables developers to create and deploy applications without the requirement of a central authority. The network utilizes the Solidity programming language and Ethereum Virtual Machine to aid developers in crafting and launching applications equipped with smart contract capabilities.
Smart contracts are verifiable codes that automate agreements between two or more parties. These codes execute pre-defined actions automatically when specified conditions are met.
Staking refers to the process of earning yield on idle crypto assets by locking them in a crypto protocol for a set duration, thereby contributing to the system’s security. Ethereum transitioned from a Proof-of-Work (PoW) to a Proof-of-Stake (PoS) consensus mechanism on September 15, 2022, in an event known as “The Merge.” This transition was a pivotal component of Ethereum’s strategy for achieving scalability, decentralization, and security while ensuring sustainability. Unlike PoW, which requires costly hardware, PoS lowers the barrier of entry for validators by depending on cryptocurrency tokens for its consensus operations.
Gas is the measure used to quantify transaction fees that users pay when conducting transactions on Ethereum. In times of network congestion, gas prices can escalate significantly, leading validators to prioritize transactions based on their fees.