$1,400 is the generation bottom of ETH? — Data sends mixed signals

Ethereum (ETH) has risen above $1,700 after 16 days of selling pressure due to macroeconomic instability and a significant drop in on-chain activity. Although it has recovered somewhat, ETH is still underperforming the broader altcoin market by 23% year-to-date.

Some traders believe that ETH will experience a "generational" price rise due to the construction of a truly decentralized and permissionless financial system. However, is this expectation in line with the current market reality?

ETH is one of the few major cryptos that did not reach a new peak in 2025, in contrast to competitors like Solana, Tron, and BNB.

Some critics argue that abandoning the Proof of Work mechanism (POW) has caused Ethereum to lose its competitive advantage compared to its rivals.

Ethereum transaction fees fall signal the weakness of ETH price

Finally, ETH may outperform its competitors, even if only for a short time, and those KOLs who predicted the "generation bottom" will celebrate as their predictions come true, despite the lack of solid fundamental factors to support sustainable price growth. However, considering that Ethereum's transaction fees have decreased by 95% since January, the likelihood of ETH rising sharply in the short term seems low.

The daily fee of the Ethereum network (USD) | Source: DefiLlamaThe low demand for data processing on the Ethereum network causes ETH to become inflationary, as the built-in coin burning mechanism is not enough to balance the amount of new coins issued to reward staking.

Although Ethereum still clearly leads in Total Value Locked (TVL), traders in general are not very interested in this metric as it does not lead to higher demand for the Ethereum network or reduce the supply of ETH.

Therefore, even if the fundamental factors of Ethereum improve, the optimism in the ETH holder community is declining, while competitors – especially the investors of Solana and XRP – are hoping for the approval of spot ETF funds in the US. Currently, spot ETF funds in the US are only available for Bitcoin and ETH, so if additional funds are approved, demand from institutions for altcoin may be dispersed.

In addition to the concerns, the Ethereum spot ETFs listed in the U.S. experienced a net outflow of $10 million from April 21 to 23, while similar products for Bitcoin recorded a record inflow.

History shows that ETH price rallies often do not last long

Historical data does not support the possibility of ETH having a sustainable competitive advantage over its rivals, which lowers the probability of a stable price rise for ETH.

The market share of ETH among altcoins | Source: TradingViewFor example, the market share of ETH in the total altcoin market capitalization hit a low in June 2022, around 26.5%, when the price of ETH fell below $1,100. After that, ETH quickly rose to $2,000 in August 2022, but the upward momentum did not last and the price of ETH fell back below $1,200 less than three months later. This sudden adjustment likely disappointed many investors, as they had to wait until eight months later, in April 2023, for ETH to return to the $2,000 mark.

A similar pattern occurred in April 2021, when ETH's market share in the altcoin market hit a low of 26.8%. Afterwards, the price rose from $2,100 to $4,200 in May 2021, but then fell below $2,000 just a month later. Once again, buyers near the peak of the cycle had to wait six months to recover their investment. This history has taught ETH traders to take profits early, reducing the likelihood of ETH reaching a new historical peak.

It is very difficult to determine what triggered previous price rises of ETH, especially as market trends constantly change — from utility tokens to NFT exchanges, artificial intelligence, memecoin, and recently asset tokenization in the real world (RWA). While some KOLs still believe in the strong upward momentum of ETH, others warn that it could fall another 15% compared to Bitcoin's performance.

Historically, the data does not support the ability of ETH to maintain a sustainable price rise, even when this coin is at the bottom compared to the total market capitalization of altcoin.

Disclaimer: This article is for informational purposes only and is not investment advice. Investors should conduct thorough research before making any decisions. We are not responsible for your investment decisions.

Dinh Dinh