Ethereum Price Stagnation Conditions, When Is a Pump Coming?

Ethereum Price Stagnation Conditions / Source: Cryptonews.com

The Ethereum (ETH) price remained near $2,700 on Friday, staying within its three-day range as traders lament its lackluster performance this bull cycle.

Yes, the Ethereum price is up 25% from its Monday flash crash lows at $2,150, but the second-largest crypto by market cap remains down around 6% on the week and around 35% from its recent highs above $4,100.

By contrast, Bitcoin (BTC) is just 10% down from the record highs it hit above $109,000 in mid-January.

While Bitcoin has powered over 40% higher versus its 2021 highs at $69,000, the Ethereum price is still down around 45% versus its 2021 highs above $4,800, and traders are getting increasingly frustrated with its underperformance.

Ethereum’s woes are likely tied to increased competition from up-and-coming competitors such as Solana (SOL) and Ethereum layer-2 blockchains, as well as the usual complaints about the blockchain being less scalable and overly expensive, which the Ethereum Foundation has been making frustratingly slow progress to address.

The altcoin market’s broader underperformance is also hurting Ethereum – the market cap of all major altcoins excluding ETH and BTC was last around $890 billion, still down 22% from its 2021 peak.

Altcoin underperformance reflects the tight financial conditions in the USA. US 10-year yields, for instance, remain near multi-decade highs at around 4.5%.

Prior altcoin seasons have coincided with periods of easing in financial conditions, notably the massive altcoin pump of 2021.

However, despite all of this, there are still plenty of reasons to be optimistic on the outlook for the Ethereum price. Here’s why.

Ethereum Price Pump Incoming?

Economic conditions in the USA don’t call for drastic (or even any) near-term easing from the Fed, suggesting a liquidity flood is unlikely to materialize to lift the market anytime soon.

That said, Ethereum could still perform well thanks to a number of factors working in its favour.

Firstly, institutions continue to stack ETH via the spot ETF , with over $500 million flowing into BlackRock’s ETF in just the last six days.

Ethereum remains the only altcoin to have a spot ETF available in the USA, and BlackRock seems intent on promoting it as its favored altcoin for institutional investors.

That likely stems from the fact that Ethereum remains the dominant DeFi chain and has been running for nearly 10 years, giving it a much more established history of security and resilience versus other newer blockchains.

Ethereum is also a “Trump family” coin, with Trump-associated project World Liberty Financial having stacked hundreds of millions of the coin, and Trump’s son, Eric, recently advising followers to stack the altcoin.

Longer-term technicals also point to growing upside risk. Analysis from Crypto Rover suggests that Q1 during a bull market is normally bullish for ETH.

Meanwhile, X user Mister Crypto showed that ETH has recently formed an ascending triangle, which hints at a likely incoming upside breakout.

The main headwind to crypto in the months ahead could come from macro – for example, a surprise tightening of financial conditions.

Otherwise, risks remain tilted to the upside, with 2025 set to be a record year of adoption for crypto more broadly.

Traders remain watchful for any shift in macro conditions that could help reignite Ethereum’s momentum, as both fundamentals and technical indicators suggest potential growth ahead.