Is Ethereum a Buy Amidst a Post-Eth Merge Market Recovery? A Technical and Fundamental Deep Dive

The Post-Merge Bull Case: Technical Indicators Signal Resilience

Ethereum's price action in October 2025 reflects a robust recovery post-Merge, with the asset trading near $4,470–$4,500, supported by immediate levels at $4,460 and resistance at $4,495, according to a BlockNews price analysis. Key technical indicators suggest a mixed but cautiously optimistic outlook. The Relative Strength Index (RSI) remains neutral, hovering around 55–60, indicating neither overbought nor oversold conditions - a point the BlockNews price analysis also highlights. Meanwhile, the Moving Average Convergence Divergence (MACD) shows a slight bearish bias in early 2025 but has begun to align with bullish momentum following the Pectra Upgrade in May 2025, which introduced EIPs like 7702 and 7251 to enhance staking efficiency, according to a CoinEdition report.

Historical backtests of MACD Golden Cross signals from 2022 to 2025 show a median 30-day return of ~4.9%, outperforming Ethereum's average 3.0% return in similar windows, though with a hit rate of ~55%. This suggests the indicator provides a mild positive drift but lacks a statistically significant edge on short-term horizons.

Analysts highlight critical resistance levels at $2,633 and $2,700, which Ethereum surpassed in late 2024, and current consolidation above $4,200 suggests a potential breakout. A V-bottom pattern and triangle formation in Q3-Q4 2025-historically associated with bullish reversals-further support the case for a rally above $7,000, per a Gate outlook. Exchange supply has hit nine-year lows, and decentralized exchange (DEX) volume surged 47% to $33.9 billion in October 2025, reinforcing the technical narrative, according to a ZoraAgent analysis.

Fundamental Catalysts: Ecosystem Growth and Institutional Adoption

Ethereum's post-Merge fundamentals are equally compelling. The ecosystem has seen exponential growth in user adoption, with active Ethereum wallets reaching 127 million as of March 2025-a 22% YoY increase, as the CoinEdition report documents. Layer 2 solutions like Base and Unichain now process 6.65 times more transactions than Ethereum's Mainnet, with Base alone recording 4.76 million active users and 1.66 billion transactions in Q2 2025, per the same CoinEdition coverage. This scalability, driven by upgrades like EIP-4844 (blob scaling), has reduced gas fees and positioned Ethereum as a cost-effective infrastructure for decentralized finance (DeFi) and non-fungible tokens (NFTs).

Institutional adoption has accelerated, with spot Ethereum ETFs accumulating $16.57 billion in assets under management by October 2025, according to a CoinCentral report. These ETFs have reduced circulating supply and attracted macro players like BlackRock, which staked $92.6 million in a single October day. Regulatory clarity, including the U.S. SEC's classification of Ethereum as a commodity in July 2025, has further legitimized institutional participation, according to a Mitosis analysis.

Competitive Positioning: Ethereum vs. Solana

While Solana's Layer 1 model offers faster throughput (tens of millions of daily transactions) and lower fees ($0.00025 per transaction), Ethereum's "rollup-centric" strategy has proven resilient. Layer 2 networks like Arbitrum and Optimism now secure $15.74 billion in total value locked (TVL) and process 2 billion ERC-20 token transfers monthly, a trend highlighted by CoinEdition. Ethereum's larger developer community (6,244 monthly active developers) and dominance in DeFi ($45 billion TVL) provide a moat against high-performance competitors, as noted in the BlockNews price analysis.

The Pectra and upcoming Fusaka upgrades (introducing PeerDAS and Proposer-Builder Separation) aim to bridge scalability gaps, ensuring Ethereum remains competitive in a crowded market - a point the Mitosis analysis emphasizes.

Regulatory and Macroeconomic Tailwinds

Regulatory developments in 2025 have been a game-changer. The SEC's commodity classification removed prior ambiguity, enabling broader institutional onboarding, as discussed in the Mitosis analysis. Additionally, updated guidance on securities classification and DAO frameworks has provided clarity for developers. Macroeconomic factors, including Federal Reserve policy and inflation trends, also favor Ethereum. If Bitcoin reaches $110,000 by Q4 2025, Ethereum could mirror its performance, with analysts projecting a potential $13,000 target - a scenario explored in the Gate outlook.

Risks and Challenges

Despite the bullish case, risks persist. Short-term volatility and corrections remain possible if Ethereum fails to break above $4,660 or falls below $3,800 support, a caveat noted by ZoraAgent. Regulatory shifts in key markets and competition from Solana and Avalanche could also pressure the price. However, Ethereum's first-mover advantage, robust developer ecosystem, and ongoing upgrades like Fusaka and Glamsterdam position it to mitigate these risks, as the Mitosis analysis observes.

Conclusion: A Buy for the Long-Term Investor

Ethereum's post-Merge trajectory, supported by technical consolidation, institutional inflows, and ecosystem innovation, presents a compelling case for long-term investors. While short-term volatility is inevitable, the confluence of favorable technical patterns, regulatory clarity, and fundamental growth metrics suggests Ethereum is well-positioned to capitalize on the next leg of the bull market. For those with a 12–18 month horizon, Ethereum remains a buy-particularly as it continues to solidify its role as a digital store of value and foundational infrastructure for Web3.