4 things should happen before Ethereum can recover $ 2,600

The price of Ether (eth) fell below $ 2,600 on February 24 and since then has had problems maintaining significant recovery. The last correction towards the level of $ 2,000 triggered more than $ 918 million in long liquidations (bull) leveraged in eth futures in 15 days, according to coinglase data.

Operators now question what should happen so that eth breaks above $ 2,500.

Ether has had a lower performance to the Altcoin market by 10% during this period, as shown in the previous table.

More worrying, this decline followed a memecoin frenzy that drove the main competitor of ethereum, Solana (Sol). This suggests that additional factors are hindering the price of eth, and four main problems should be addressed before Ether can claim a bullish market.

ethereum updates and greater competition

For some, the next tong update in the ethereum network does not reach what is needed to boost a significant change, whether it reduces the transaction rates of the base layer or significantly improve the usability.

Even if the changes improve user experience, analysts argue that ethereum still lacks interoperability in different layer 2 solutions, both in terms of liquidity and user accessibility.

Recent empty block reports in the ethereum Testnet have added to the perception of risk at a time when investors were already skeptical. Regardless of whether this problem is not related to the next update or easily repairable, some operators are concerned that the market can negatively perceive any possible delay.

In essence, fear remains the dominant feeling, and for this to change, several pressing problems must be solved.

Critics argue that part of the disappointment of eth investors comes from the emergence of indirect competitors, such as Modular Berachain layer 1, which focuses on integrating liquidity and governance for decentralized finance applications (Defi).

Berachain has successfully captured more than $ 3 billion in deposits, measured by the total blocked value (TVL) in Defillama.

Similarly, Hyperliquid, an application of perpetual future housed in its own block chain, has exceeded $ 2.8 billion in open interest, surpassing competitors in the ethereum Network. In many ways, competition is growing beyond the traditional model.

In order for the price of eth to recover a bullish impulse, merchants need peace of mind that the ethereum network offers practical and clear advantages for their projects and users. Ultimately, the ethereum approach in decentralization and incremental improvements, whether justified or not, could be the demand for most compared to its competence.

Weak activity in the chain and institutional demand

The lack of demand for institutional investors is evident in the flows of the cotted fund in the spot (ETF) exchange, which were negative in nine of the last 10 days of negotiation, which resulted in $ 406 million in net retreats.

Some analysts suggested that the demand could increase after the eventual approval of the native participation in the ETF of ethereum, but this theory is now less safe, since the eth supply increases to 0.7% per year.

The lower processing demand for blockchain has reduced the burning rate mechanism, which makes the ether become inflationary. As a result, the adjusted native rethink rethink is now below 2.5%, while stable deposits produce up to 4.5% in most of the defi projects.

Ultimately, it is unlikely that the eventual inclusion of the rethinking in the ETF spot is a change of game for institutional demand.

Related: Defi TVL falls at $ 45b, erasing profits from Trump's choice

Finally, merchants are concerned that the US stock and securities commission can approve an ETF Spot Solana in 2025, creating direct competition for investors that currently only have access to ETF Ether and bitcoin (btc) products.

Therefore, for eth Price to reach $ 2,500 and beyond, investors need clearer evidence that ethereum offers sustainable advantages beyond their first movement advantage.

In summary, Ether's future depends on the updates of the ethereum Network, the increase in the use of the network, a subsequent decrease in the supply and reduction of friction for the interoperability of layer 2, ensuring that the entire ecosystem benefits from its growth.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The points of view, the thoughts and opinions expressed here are alone of the author and do not necessarily reflect or represent the opinions and opinions of Cointelegraph.