ethereum (eth) consolidated near $3,400 on Tuesday, set to close out the year with a roughly 50% return. ethereum has seen disappointing gains compared to bitcoin and most altcoins are among the top 20 tokens by market capitalization.
The narrative could change in 2025 with catalysts such as the upcoming ethereum upgrade, accumulation by institutional investors, and other market drivers.
<h2 class="wp-block-heading" id="ethereum-gears-for-pectra-upgrade-in-2025″>ethereum prepares for Pectra upgrade in 2025
ethereum could see an increase in scalability, security, and user experience with the upcoming Pectra upgrade, which is expected to go live in 2025. The upgrade will introduce improvements to account abstraction, validator operations, and performance of the network.
The goal is to improve the user and developer experience on ethereum and facilitate the implementation of future scalability updates.
Validator stake limits, stake withdrawals, and simplified smart contract development could improve the security and efficiency of the ethereum network. This could have a ripple effect on Layer 2 chains that rely on ethereum for their security infrastructure.
Pectra will be the third major upgrade in the ethereum ecosystem after the merger, and its successful execution could act as a catalyst for Ether's recovery in 2025.
ethereum analyst Anthony Sassano estimates that the Pectra upgrade will be available next March or April. In particular, Unichain, an ethereum-based protocol, which will launch its mainnet in early 2025, aims to use blobs, and Pectra's improvements could help ethereum meet Unichain's scalability requirements.
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Institutional Investors Accumulate Ether During Dips
On-chain data intelligence platform Santiment shows a steady increase in two key metrics: the supply held by top non-exchange wallet addresses and top token addresses as a percentage of total supply.
An increase in these metrics during November and December indicates that large wallet investors are accumulating Ether.
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Data from Lookonchain shows that entities such as Donald Trump-backed World Liberty Financial purchased Ether tokens during eth price declines.
As the supply of Ether held by large entities outside of exchange platforms increases, it indicates whale accumulation, a typically bullish indicator for eth.
<h2 class="wp-block-heading" id="us-based-spot-ethereum-et-fs-could-pass-on-staking-yield”>US-Based ethereum Spot ETFs Could Pass On Staking Returns
While the SEC has approved several US-based ethereum spot ETFs, none currently include staking performance. The regulator has rejected all ETF proposals, including staking, unlike those in Switzerland and Canada.
Pro-cryptocurrency regulations under President-elect Donald Trump could pave the way for investors to increase returns through eth staking rewards. ETF issuers could benefit from staking rewards through higher net asset value, lower management fees and dividends.
A report from Bernstein Research suggests that under a crypto-friendly Trump administration, the SEC is likely to approve yield staking for ethereum ETFs.
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Greater adoption among institutions, outside of symbolic utility
Dario Lo Buglio, CTO of Brickken, told crypto.news in an exclusive interview:
“There is one thing people should remember about ethereum: not only does it have financial use cases like bitcoin, but it also has smart contracts. It can be used for programming applications and there must be a balance between the value of ethereum and its usefulness as a form of payment and decentralized applications.
I wouldn't say there is a delay in price. Where I think there is a delay is in active development. And because it is the largest decentralized blockchain, it takes time to make changes, unlike Solana and other protocols that can be updated without problems.”
Lo Buglio remains optimistic about ethereum adoption among institutions for its smart contract functionality and underlying technology.
Technical analysis and objectives.
ethereum was around $3,400 on December 31. The coin faces resistance at $3,497 and finds support in the fair value gap between $3,159 and $3,257. On the eth/USDT daily price chart, technical indicators support a bullish outlook for Ether.
The relative strength index is 46 and is sloping upward, indicating positive underlying momentum. The moving average convergence divergence shows consecutively shorter histogram bars, suggesting that the negative momentum is likely waning.
Traders should be on the lookout for a possible reversal in the ethereum price trend.
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The target for Ether is $4,500, with psychologically important support at $3,000, as shown on the daily eth/USDT price chart.
Disclosure: This article does not represent investment advice. The content and materials appearing on this page are for educational purposes only.
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