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The recent downgrade of Ethereum’s price forecast by leading financial institutions highlights growing concerns over its market viability.
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As Ethereum struggles to maintain its foothold, analysts warn that its prospects for recovery might be more daunting than previously anticipated.
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“Catching a falling knife” aptly describes the current state of Ethereum trading, according to crypto analyst Aksel Kibar, reflecting the high risks involved.
Ethereum’s price forecast has been significantly revised downward, raising concerns about its future in the cryptocurrency market.
Standard Chartered’s Significant Revision of ETH Price Target
In a surprising turn of events, Standard Chartered has slashed its end-of-2025 price prediction for Ethereum, decreasing it from $10,000 to just $4,000. This dramatic 60% reduction mirrors shifting sentiment in the crypto market toward Ethereum’s long-term viability.
According to Geoff Kendrick, the bank’s global head of Digital Assets Research, this revision stems from a broader expectation that ETH will continue its structural declines. Kendrick notes that layer 2 blockchains are significantly impacting Ethereum’s scalability and market cap.
The Impact of Layer 2 Solutions on Ethereum’s Market Position
Kendrick highlights that layer 2 platforms, particularly Base, have unexpectedly siphoned off about **$50 billion** from Ethereum’s market capitalization. This phenomenon contradicts the expectations that such upgrades would enhance Ethereum’s scalability and profitability.
While these layer 2 solutions aim to alleviate congestion on the Ethereum network, Kendrick points out that they are essentially redistributing fee revenues that would typically benefit Ethereum. He states that Base, detailed in the latest Dencun upgrade inclusion, has garnered significant fee revenue, but this is being transferred to Coinbase, its corporate parent—further diminishing Ethereum’s economic prospects.
VanEck Joins the Downgrade Consensus
Adding to the bleak outlook, VanEck analysts, including Matthew Sigel and Patrick Bush, concur with Standard Chartered’s evaluation. They note that Ethereum’s decline stems from the erosion of its foundational attributes that once positioned it as a leading cryptocurrency.
Their research indicates that competition from layer 2 blockchains like Arbitrum and Base, alongside the rise of memecoin trading on the Solana blockchain, has negatively affected Ethereum’s fee structure and overall market appeal.
Short-Term Price Dynamics for ETH
Trading data indicates that Ethereum’s price remains over **52% lower** than its December 2024 peak of $4,107, reflecting a substantial decline that has persisted throughout 2025. With a current trading volume that lacks the momentum necessary for recovery, many analysts echo Kibar’s sentiment of caution, advising traders to reassess their positions.
Kibar’s comparison of trading Ethereum to “catching a falling knife” underscores the high-risk environment that traders face, particularly as current market structures do not suggest a bottoming formation for Ethereum. Consequently, those anticipating a rebound in ETH’s performance may need to exercise patience while watching market dynamics unfold.
Conclusion
The downgrades from Standard Chartered and VanEck reflect a growing consensus among analysts regarding Ethereum’s challenges and future market prospects. As layer 2 solutions continue to disrupt the traditional Ethereum ecosystem, traders and investors should approach the market with caution, fully aware of the risks associated with potential price volatility.
