TLDR:
- Ethereum price is trading around $1,580, down 1% in early Asian trading on Thursday
- ETH’s data availability roadmap has limited its value accrual, causing it to lose ground to Solana and BNB Chain in fees captured
- Based rollups could improve ETH’s value accrual but aren’t a priority in upcoming Pectra and Fusaka upgrades
- ETH faces resistance at $1,688 and the 50-day SMA
- Key support exists in the $1,450-$1,550 range where investors previously bought over 1.2 million ETH
Ethereum’s price has been facing downward pressure, trading just below $1,600 as reports indicate its data availability roadmap is hampering value accrual. The second-largest cryptocurrency by market cap is currently struggling to maintain momentum amid technical weakness and changing market dynamics.
According to a recent Binance Research report, Ethereum’s pivot to its data availability roadmap following the Dencun upgrade in March 2024 has created a mixed situation. While the upgrade increased Ethereum’s scalability by nearly 16 times, it came at the cost of reduced fees captured on the Layer 1 blockchain.
The Dencun upgrade enabled Layer 2 solutions to improve their throughput and lower costs while paying minimal fees for Layer 1 settlement. This development has directly impacted Ethereum’s value accrual and weakened the “ultrasound money” narrative that largely depends on gas fees.
As a result, Ethereum is losing ground to competitors like Solana and BNB Chain in terms of fee capture. This shift has prompted discussions within the Ethereum community about potential solutions.
Balancing Scalability with Value Accrual
One popular suggestion to address ETH’s value accrual issues involves repricing the blob fee market while continuing to increase blob count. However, the Binance Research report cautions that Layer 2 platforms might seek cheaper alternatives if minimum blob fees become too expensive.
Alternative data availability layers such as Celestia, EigenLayer, and NearDA currently offer higher throughput at substantially lower fees compared to Ethereum. This competitive landscape presents a challenge for Ethereum’s fee structure adjustments.
Despite these challenges, Ethereum maintains a significant advantage in terms of security. The network boasts over 1 million nodes, far surpassing Celestia’s 100 nodes and EigenDA’s 170 nodes.
Many experts view based rollups, which rely on Layer 1 sequencing, as a potential solution to Ethereum’s scalability and value accrual challenges. Taiko, a based rollup, has already demonstrated this potential by contributing more fees to Ethereum than the top three Layer 2 solutions combined, despite posting the least amount of data to the Layer 1 over the past year.
However, the report notes that based rollups are not considered a “top priority” in Ethereum’s upcoming upgrades. The Pectra upgrade is scheduled for May 7, 2025, while the Fusaka upgrade is expected to hit the mainnet in Q4 2025.
Technical Analysis and Market Sentiment
From a technical standpoint, Ethereum has been experiencing some weakness. The cryptocurrency saw $57.08 million in futures liquidations in a 24-hour period, with long liquidations ($38.16 million) exceeding short liquidations ($18.92 million).
ETH’s price action has tilted slightly downward since being rejected at the $1,688 resistance level on Monday. Additional resistance exists at the 50-day Simple Moving Average and a descending trendline extending from March 23.
For bullish momentum to return, Ethereum would need to flip these resistance levels into support. If successful, the cryptocurrency could be positioned for a substantial recovery.
On the downside, the $1,450 to $1,550 range represents a crucial support zone. This area has previously seen strong buying interest, with investors purchasing over 1.2 million ETH within this range according to Glassnode data.
Technical indicators also suggest caution. The Relative Strength Index (RSI) is currently below its neutral level and testing its moving average line. Meanwhile, the Moving Average Convergence Divergence (MACD) is showing receding green histogram bars, indicating weakening bullish momentum.
Whale Activity and Analyst Perspectives
Market activity shows mixed signals from large investors. Data from Lookonchain indicates that some long-term holders are selling their positions in the $1,550 to $1,700 range, even after holding through the previous market cycle.
After holding $ETH for 11 months, this guy capitulated and sold all 1,160 $ETH($1.83M) at a loss of $2.6M(-58.6%)!
11 months ago, he withdrew 1,160 $ETH($4.43M) from #OKX at $3,816, and deposited it to #OKX at $1,580 ~30 minutes ago, losing $2.6M(-58.6%).… pic.twitter.com/Cl0ebXie1f
— Lookonchain (@lookonchain) April 16, 2025
However, not all large holders are exiting. Recent data shows that one group of whales purchased approximately 77,000 ETH worth $125 million, signaling continued interest at current price levels.
Analysts offer varying perspectives on Ethereum’s near-term outlook. Market analyst Solomon Geta suggests Ethereum’s price could stabilize in the $1,550 to $1,600 range, with potential for increases as global markets improve. Geta also notes that a breakout above the $1,670 barrier could trigger a rally toward $2,000.
Meanwhile, analyst CrypNuevo expresses optimism about ETH’s potential for a bullish surge, citing the steady support of Bitcoin’s 1-week 50 EMA. CrypNuevo has made substantial spot purchases in the $1,550 to $1,700 range.
Ethereum’s price currently sits at approximately $1,580, down 1% in early Asian trading on Thursday. The cryptocurrency faces immediate resistance at $1,688, with key support in the $1,450 to $1,550 range
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