Ethereum price will stick below $3.5K until these 3 things happen
Ethereum (ETH) price has struggled to trade above $3,500 since falling below that level on January 7, declining by 8% over the past month, despite a 6% increase in the broader crypto market. Key issues include average Ethereum transaction fees exceeding $2, rising ETH supply, and increased competition from other blockchains, particularly Solana. For ETH to surpass $3,500, three factors need to be addressed: the Pectra upgrade's impact, changes in U.S. ETF regulations, and growth in layer-2 solutions. The anticipated Pectra upgrade, scheduled for Q1 2025, aims to enhance interoperability and wallet management, though investors are concerned it may not generate sufficient fees from layer-2. Additionally, TVL in Ethereum layer-2 solutions has decreased by 25% since its December 2024 peak. Institutional demand for Ether has also waned, with spot Ether ETF inflows failing to reach $150 million since mid-January, underscoring the need for regulatory changes to boost investor confidence.
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