Source: Unsplash

Except for those living under a rock, no crypto stakeholder hasn’t noticed Ethereum’s decline over the past few months. The price action, market dominance, and community sentiment — just name it, everything is at an all-time low! The top cryptocurrency seems to be tanking hard — it hasn’t even made a new all-time high in this cycle. In the past few days, however, ETH seems to be making a comeback. Why has it been down for many months, and will it make a recovery with current momentum?

Ethereum Struggles

Ethereum is struggling; there is no doubt about it. Since December 2024, whenever a shift in market sentiment leads to a decline across the crypto market, only Bitcoin resurges to its previous price level and surpasses it. As for Ethereum, it goes down and almost never makes it back.

Here’s how the ETH market has been over the past few months. The market started in November 2024 in the green zone, with Bitcoin trading around $96,405 and Ethereum at $3,703. On the first day of December 2024, a slight downturn affected the market, and BTC dropped to $93,557 and ETH to $3,337. Although both top cryptocurrencies hit significant levels later that month, they couldn’t hold, suffering a decline again.

About a month later, on January 1, 2025, Bitcoin traded at $94,500, a little above the previous month’s price. As for Ethereum, it fell further, priced at $3,298. In the following month, February, on the first day again, price data showed BTC’s huge dip to $84,381 and ETH to $2,236. BTC managed to reach $102,000 later that month, but ETH couldn’t rally to its former levels. And when Bitcoin rose from $84,381 in February to stabilize at $94,304 in April, Ethereum was on a continuous fall, unable to retest former highs. In fact, the BTC/ETH ratio has widened, as chart data shows.

Source: CoinMarketCap

ETH trades at around $2,400 at press time, a good increase considering its performance over the months. However, it has yet to make a play for high price levels. What could be wrong with the ETH market? Let’s touch on a few points.

Bitcoin And Meme Coins Have Stolen The Show

Bitcoin and Meme Coins have stolen the show in recent months. You probably heard about the US government’s plan to set up a Bitcoin reserve. This plan is on the lips of retail and institutional players, as many states across the US are also working on a strategic Bitcoin reserve. Texas and New Hampshire have made progress in this regard, as have some states in the US and some other countries.

The interest of sovereign states has added to the interest of market whales and institutional players. Just recently, Michael Saylor announced that Strategy (Formerly MicroStrategy) made additional Bitcoin purchases to increase its margin as the public company with the largest Bitcoin holding. Out of the 21 million Bitcoin supply, Strategy holds over $555,000 BTC.

As Bitcoin takes center stage, overshadowing Ethereum, Meme Coins are also doing the same. And unfortunately, they are not launching on the Ethereum chain. Fartcoin, one of the most successful meme coins in 2025 with over a billion market capitalization, launched on the Solana chain. The popular meme coin launcher, PumpFun, is also on Solana. You may not have noticed, but the most popular meme tokens created in late 2024 and 2025 are on PumpFun.

Source: CoinMarketCap

So, Ethereum evidently missed out on the action. Also, talks about DeFi are significantly down since no major novel innovations are coming from it. Overall, ETH isn’t at the center of any major boom — nothing to fuel its price rise.

Losing Liquidity To Its Children Network

Ethereum’s high gas fees have always been a major deterrent to its growth. To make matters worse, the Ethereum network is swamped with Layer-2 networks like Polygon, Optimism, Base, Linea, Arbitrum, and plenty of others. What happens is that these layer-2 networks vie with ETH for liquidity. With USDC in the picture, they don’t require much ETH to get things done. Not to mention that numerous activities are possible on these layer-2 platforms, so fewer transactions go through the Ethereum main chain. Hence, the demand for ETH isn’t rising as it would have if there were a high level of chain usage.

Competitive Networks

We’ve touched a little bit on how competitors like Solana are diluting Ethereum’s market dominance. The fact is that Solana provides a better experience for developers and users. Who wouldn’t want a chain that offers faster, cheaper, and larger services? In a Coingecko report about Solana, the ongoing activities on the chain reveal why it continues to record more influx of developers and retailers. Some reasons that stood out are:

• Higher performance and scalability: Solana processes up to 3,000 transactions per second, although theoretically, Solana can achieve 65,000 TPS. Whatever the case, Ethereum’s 15 Transactions per second is no match. When you factor in how extremely cheap Solana is while processing large transactions, it’s clear why developers prefer it to Ethereum.
• Active and helpful ecosystem: The availability of resources and tools for developers to build likewise adds to the growth trajectory. The Solana ecosystem opens up the opportunity to get developer kits and funding opportunities, and allows new projects to spring up seamlessly.

Like Solana, Avalanche is also growing in popularity and capability. The Institutional adoption of these layer-1 platforms will further diminish Ethereum’s dominance. Hyperliquid and Tron are making headway in the perpetual futures of trading and advancement in the stable market, respectively.

Minimal Institutional Interest

While firms, market bulls, and countries worldwide keep accumulating Bitcoin, the narrative is different in the case of Ethereum. According to Coingecko data, only a few public companies hold Ethereum, and its worth is under $500 million, while the figure for Bitcoin stands above $50 billion at the time of writing.

The crypto ETF market reveals the sharp difference in demand for Bitcoin and Ethereum, as the latter has failed to record high numbers like the former. The ETF inflow shows that Bitcoin enjoys a first-mover advantage and is a widely accepted store of value, thereby drawing huge investments from big-bag investors. As for Ethereum, even though it has recorded billions in Spot ETF funds, its figures still trail those of Bitcoin significantly.

Hope For Ethereum: Is It Making a Comeback?

Ethereum needs a reawakening to regain market dominance, attract investment across the board, and surge in value. At the time of writing this article, Ethereum just activated an upgrade. While this is a welcome development, it won’t solve the challenge of bridging assets and data across Ethereum’s layer-2 ecosystem. Solana and the likes still have an edge over it, as users can seamlessly switch between multiple decentralized applications (DApps). Regardless, the upgrade seems to be positively affecting Ethereum’s price, as it rose by 20% in the last 24 hours to reach $2400. Is the premier altcoin making a comeback at this time? We must patiently wait to see how much improvement the recent upgrade will bring to the Ethereum chain and if this is sufficient to put ETH back in the race!

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