Ethereum News: Can Ether Return to 4000 USD? Key Indicators Deciding ETH's Trend in 2025

Key points: Low on-chain usage, low transaction fees, and increasing competition from other blockchains and upcoming altcoin ETFs limit the upward space for Ethereum (ETH). A recovery requires stronger network activity, clearer benefits from the Fusaka upgrade, and a reflow of institutional funds. With the motivation for reserve companies to accumulate more ETH diminishing, Ethereum's trading price is approaching $3200. Ethereum (ETH) continues to struggle below the $4000 mark reached on October 29, with each rebound attempt quickly fading. The divergence between the strong momentum of institutional funds in Ethereum and the weak price trend raises questions among traders about what is hindering ETH's development as 2025 approaches. A major driving factor is the decline in network usage. In the past 30 days, Ethereum's trading volume has decreased by 23%, and the number of active addresses has fallen by 3%. In the same period, other competing ecosystems, including Tron, BNB Chain, and Solana, achieved double-digit growth, thanks to lower fees and a smoother user experience. Since staking rewards are the main reason many investors hold ETH, the natural decline in trading activity and lower Gas fees puts pressure on prices. Ethereum's fees have dropped by 88% from the peak at the end of 2024, reducing staking rewards and weakening one of ETH's core value propositions. 1. Ethereum needs more active on-chain trading and higher fees. The slowdown in network demand is the main resistance ETH faces. Trading activity, initially driven by memecoins and speculative activities, has faded, leading to lower transaction fees and a corresponding decrease in staking income. Fees have fallen from $70 million per week at the end of 2024 to the lowest level in over a year, putting pressure on ETH's earnings-based narrative. 2. The Fusaka upgrade must bring clearer benefits to ETH holders. Although the upcoming Fusaka upgrade is expected to improve data processing through Rollup, traders state that how ETH holders will gain economic benefits remains unclear. Without a clearer value accumulation mechanism—such as fee flows—these benefits will be difficult to realize. Higher burn rates or improved staking mechanisms are still not high on the urgency list of upgrades. 3. Ethereum faces increasingly fierce competition from Solana, BNB Chain, and new altcoin ETFs. At the beginning of 2024, Ethereum dominated institutional fund inflows. After the launch of the US spot Ethereum ETF, fund inflows drove Ethereum to rise 140% in the 100 days leading up to the $4200 peak. But the situation is changing. With the launch of the Solana ETF and XRP, BNB, and Cardano ETFs preparing for approval, institutions may begin to shift funds to other assets. This could divert funds away from Ethereum, especially as other networks see growing user activity and DApp revenue. 4. Strategic reserve companies must return to the accumulation phase. Ethereum's drop to $3200 has forced strategic Ethereum reserve companies to trade below their net asset value (mNAV). When mNAV declines, these companies lose the motivation to issue new shares to purchase more ETH—this mechanism had previously driven prices up. With issuances paused, reserves may need to rely on debt or other strategies, reducing a key source of high confidence demand for ETH. Can Ethereum return to $4000 before the end of the year? Ethereum still possesses structural advantages—leading TVL, a thriving Layer-2 ecosystem, and the deepest institutional liquidity outside of Bitcoin. However, returning to $4000 depends on the coordination of four key driving factors: more active on-chain activity and higher fees to improve staking rewards; clearer Fusaka upgrade value for ETH holders; despite the emergence of new altcoin ETFs, institutional funds can continue to flow in; ETH reserve companies resume accumulation. Before these conditions strengthen, even if the entire Ethereum ecosystem continues to expand, ETH's price may continue to be hindered below key resistance levels.