Ether Surges 16% After 16 Days of Selling Pressure

Ether (ETH) has recently surged above $1,700 after experiencing 16 days of selling pressure due to macroeconomic uncertainty and a decline in onchain activity. Despite this rebound, Ether has underperformed the broader altcoin market by 23% year-to-date. Some traders are optimistic about a potential "generational" bull run for ETH, citing its decentralized and permissionless financial system. However, this optimism is not universally shared, and there are several factors that suggest a more cautious outlook.

Ether was one of the few major cryptocurrencies that did not reach a new all-time high in 2025, unlike competitors such as Solana (SOL), Tron (TRX), and BNB (BNB). Critics argue that the shift away from proof-of-work mining has removed a competitive advantage that Ethereum once had over its rivals. Additionally, the 95% drop in Ethereum fees since January indicates low demand for data processing on the Ethereum network, making ETH inflationary as the built-in burn mechanism is insufficient to balance the new coins issued to cover staking rewards.

Despite being the leader in Total Value Locked (TVL), traders are generally uninterested in this metric since it hasn’t translated into higher demand for the Ethereum network or increased scarcity for ETH. This lack of interest, combined with the approval of spot exchange-traded funds (ETFs) for competitors like Solana (SOL) and XRP (XRP) in the US, could reduce institutional demand for altcoins. US-listed spot Ether ETFs saw $10 million in net outflows between April 21 and April 23, while similar BTC instruments experienced record-breaking inflows, adding to the concerns.

Historical evidence does not favor a lasting outperformance of ETH compared to its competitors, which lowers the odds of a sustainable ETH rally. For example, Ether’s market share in the altcoin capitalization reached a low point in June 2022 at around 26.5% when the ETH price dropped below $1,100. After a quick rally to $2,000 by August 2022, the momentum faded, and ETH’s price fell below $1,200 less than three months later. This sudden correction likely left many investors frustrated, as they had to wait eight months for ETH to reclaim $2,000 in April 2023. A similar pattern happened in April 2021, when Ether’s altcoin market share bottomed out at 26.8%. After that, the ETH price climbed from $2,100 to $4,200 by May 2021, only to fall below $2,000 the following month. Again, traders who bought near the cycle top had to wait six months just to recover their investment. This history has taught Ether traders to take profits quickly, which reduces the chances of reaching a new all-time high.

It is difficult to pinpoint what triggered previous Ether bull runs, especially as the narrative has shifted from utility tokens to NFT marketplaces, artificial intelligence, memecoins, and, more recently, RWA tokenization. While some influencers believe in strong ETH momentum, others warn there could be another 15% drop compared to Bitcoin’s performance. In the end, historical evidence does not support a lasting ETH price rally, even if it bottoms out relative to the broader altcoin market capitalization.