I have been researching Ethereum closely, and the more time I spend on it, the more I start to understand why the market feels so divided right now. On the surface, Ethereum looks like it has stabilized. The price is hovering around $2,100, which already feels like a relief after the sharp drop to $1,750 just a few days ago. From that low, it has recovered more than 20 percent, and for many people, that sounds like a strong comeback.But when I look deeper, it becomes clear that this recovery is fragile.
Only a short time ago, Ethereum went through a brutal decline, losing around 43 percent of its value in just nine days. That kind of move leaves damage behind. Even though the price has stopped falling for now, the market has not fully regained confidence. I start to notice this when I look at futures data. Professional traders are still cautious. In my search, I found that futures prices are only slightly higher than spot prices, which usually means traders expect more risk ahead rather than a strong rally. If confidence was really back, that gap would be wider.
At the same time, I cannot ignore how strong Ethereum still is at a fundamental level. Despite price weakness, it remains the backbone of the crypto ecosystem. When I researched total value locked across blockchains, Ethereum still dominates by a huge margin, especially when its layer two networks like Base, Arbitrum, and Optimism are included. Most decentralized apps that people actually use are still built on Ethereum. Compared to other chains, even their biggest applications struggle to match the scale Ethereum has already reached.
Fees tell a similar story. Ethereum continues to generate a large amount of revenue from real usage, not hype. That tells me the network itself is not broken. People are still using it, building on it, and paying to interact with it. From a long-term perspective, that matters more than short-term price swings.
However, on-chain activity shows another side of the story. As Ethereum’s price dropped from around $3,000 toward $2,000, the number of tokens being transferred on the network suddenly jumped. In my experience, this kind of spike usually does not mean healthy growth. It often means stress. People are moving funds quickly, repositioning portfolios, exiting risky positions, or getting liquidated in DeFi. This kind of behavior often happens near fear-driven moments, what many call capitulation. Sometimes, that clears the way for stability later, but it does not guarantee an immediate recovery.
When I look at the charts, the technical picture also feels heavy. Ethereum is trading below important long-term averages, including a level many traders use as a historical support reference. If price stays below that zone for too long, it usually weakens sentiment even further. It tells the market that buyers are still hesitant.
Another thing that surprised me in my research is Ethereum’s supply. For a long time, many people believed ETH would be deflationary. Recently, that has changed. Over the past month, the supply has actually been increasing at a noticeable pace. This happens partly because activity on the main chain has slowed as users move to cheaper layer two networks. That raises questions about one of Ethereum’s strongest narratives.
Even Vitalik Buterin has acknowledged that scaling Ethereum through layer twos has not been as smooth as originally hoped. Some of these systems still rely on structures that do not fully meet Ethereum’s original security vision. From what I understand, this could push Ethereum back toward focusing more on scaling the base layer in the future, but those kinds of changes take time.
So where does that leave Ethereum now. From everything I have researched, it feels like a period of consolidation is more likely than a strong breakout. The price may move sideways between $2,000 and $2,400 while the market waits for clarity. For Ethereum to truly recover, it would need to reclaim higher levels and show stronger confidence from traders, not just users.
On the other hand, if it drops below $2,000 again, the pressure could increase quickly, and the market might revisit the recent lows. For now, Ethereum feels like a network that is fundamentally strong but emotionally bruised. The bleeding has stopped, but the healing process is still ongoing.
$ETH #BinanceSquareTalks #BinanceSquareFamily #ETHETFsApproved