Ethereum Surges 8% After Institutional Inflows and Layer-2 Adoption

Ethereum ($ETH) has recently experienced a significant rebound, surging $200 from its key support level of $2,400. This recovery comes after the cryptocurrency weathered a brief rounded top pattern, which is typically interpreted as a bearish reversal. The rebound is supported by institutional inflows and the increasing adoption of Layer-2 solutions, which are designed to address high fees and scalability limitations on the Ethereum network.

Ethereum's network activity and Layer-2 innovation continue to be unrivaled. Since its launch in 2014, Ethereum has become the leading platform for smart contracts and decentralized applications (dApps). Its flexible architecture allows for the creation of secure DeFi protocols, NFT marketplaces, and efficient Layer-2 solutions. This technological foundation continues to attract builders worldwide, reinforcing Ethereum's long-term viability.

The network remains the leading blockchain for utility and trust, with a total value locked (TVL) of $62.6 billion, commanding 53% of global DeFi TVL. This surpasses competitors like Tron, Solana, and Avalanche. Ethereum processes 1.45 million daily transactions and hosts over 645,000 active wallets, indicating strong and consistent usage. The Pectra upgrade has further enhanced staking efficiency and Layer-2 scalability, reinforcing Ethereum’s long-term viability.

Ethereum hosts industry-leading DeFi platforms, including Uniswap, the largest decentralized exchange; Aave, a leading lending protocol; and Curve Finance, a dominant stablecoin decentralized exchange. Layer-2 solutions such as Optimism and Arbitrum have recently surpassed 2 million daily transactions, while zkSync and StarkNet offer faster and cheaper transactions while taking advantage of Ethereum’s existing security infrastructure.

Institutions are increasingly adopting Ethereum as a reserve asset, similar to that of Bitcoin. Bit Digital, a Nasdaq-listed company, raised $163 million to expand its Ethereum treasury, now holding 24,434.2 ETH. The firm is shifting from Bitcoin mining to Ethereum staking infrastructure. SharpLink Gaming has also become the world’s largest corporate Ethereum holder, with 188,478 ETH (worth $457 million) acquired through aggressive buying campaigns. Other public companies, such as BitMine and BioNexus Gene Lab, have also adopted Ethereum as a reserve asset, indicating growing institutional confidence in its long-term value.

Despite the recent rebound, Ethereum's 30-minute chart presents a clear rounded top formation, which is typically interpreted as a bearish reversal pattern. The arc began forming on June 29, with Ethereum gradually losing upward momentum after peaking just below $2,530. This slow transition from bullish to bearish sentiment is often driven by fading buyer interest and profit-taking, leading to a progressively weaker price structure. The rounded top was completed between June 30 and July 1, culminating in a breakdown below the neckline zone near $2,470, marked with a red arrow. This breakdown indicates a shift in market control from buyers to sellers, leading to a sharp price rejection and initiating a short-term downtrend. The decline pushes $ETH down to lows of approximately $2,390, a retracement of over 5% from the local high. Following the breakdown, the chart shows signs of short-term recovery, with buyers stepping in around the $2,400 support zone. A green candle appears near July 2, indicating a potential relief bounce or dead cat bounce. However, unless Ethereum reclaims the $2,470–$2,600 zone convincingly, this move may be short-lived. In summary, Ethereum has exhibited a textbook rounded top breakdown, and caution is advised unless a strong recovery invalidates this bearish setup.