In the turbulent situation, can Ethereum "change bones and seek change" hit a new high?

Compiled by: ChainCatcher

Despite the recent geopolitical turmoil, Ethereum has become the focus of market attention against the trend due to its overall market correction in the context of ETF net inflows and capital activity. At the same time, the Ethereum Foundation has launched financial policy reforms and internal restructuring, sending out a signal of strategic adjustment . How this move will affect the medium- and long-term trend of Ethereum has become a core topic discussed in the field of encryption, and it also indicates that Ethereum is standing at a key node of "changing bones and seeking change", and its possibility of breaking through a new high in the future has attracted much attention.

In this issue of Space's "Bone Change: Can Ethereum with Reversing Fundamentals Breakthrough High?", we invited Eight guests to "Kiwi, Head of Research at OKX Ventures, Co-founder of Infini, Princess Christine, Well-known E Guard Yinghao LIN, Pepper Huajiao, ChinaChic NFT Co-founder LEE CHAN, Bitget Researcher Aaron, Market Leader of Hash Epoch, and CGV Investment Analyst Cynic, to submit PIPE around the joint force behind Ethereum's rise, SharpLink The market fluctuations caused by the document, as well as the dominant capital force and potential explosion tracks in the Ethereum ecosystem, clarify the real motivation behind the changes in the on-chain trends, and explore early opportunities and value depressions worth paying attention to in the new cycle.

The full version can be clicked to listen to the playback: https://x.com/i/spaces/1OdKrDRqElwJX

Question 1: What is the main reason for Ethereum’s recent rise? Is there a possibility of rebound after a decline?

Kiwi: I think there are several factors in Ethereum's recent rise. First of all, there are indeed reasons why ETFs are taking the lead. Many investors have laid out pledged related ETFs in advance, which is a driving force behind the previous main upward trend. These buying mainly come from the Western market, and the rise lacks particularly clear support, which also leads to a decline after consumption of positive factors.

Secondly, from the perspective of chip structure, the large-scale selling of Ethereum by early crypto investment institutions in the market has decreased, indicating that the chip structure has been optimized. Although some previous bottom buyers are cashing out, the overall position is still improving.

As for fundamentals, some people are paying attention to the recent actions of the Ethereum Foundation, but I personally believe that these effects may not appear after a year or two and do not have short-term guidance. Regarding futures indicators, it is often the result rather than the cause. For example, these indicators in the main upward trend of Bitcoin in the past may not be effective. Therefore, I do not recommend over-reliance on this data.

Yinghao: What I feel most intuitively about this round of Ethereum’s rise is a kind of power of “joint force”. If large-scale assets like Ethereum want to break through new highs, they must rely on the gathering of consensus in multiple aspects, not just the single-dimensional driving force.

In the past few cycles, Ethereum has established a solid foundation in technological narratives, such as the positioning of computers in the decentralized world. At the same time, the application layer has gradually become richer, carrying a large number of consensus among users and retail investors. However, at that time, one key factor was still missing: the recognition of the top will.

Today, the shift in regulatory attitudes Ethereum has received, especially from U.S. regulators, marks that top will is redefining its asset attributes. This recognition not only enhances market confidence, but also creates space for the reconstruction of prices and valuations.

History is often spiral upward and wavy forward. We see that from developers, users, to policy levels, a real "joint force" is gradually forming. It doesn't mean that Ethereum can replicate the path to Bitcoin, but at least, this is the first time we have truly felt the driving force brought by the confluence of multiple forces.

pepper: Ethereum’s fundamentals have not actually become worse. The pledge volume continues to grow, the inflation rate remains at 2%-3%, and the overall health is.

But from a market perspective, ETH/BTC leverage on Bitfinex is close to the liquidation line, and the technical side is weak last week, under short-term pressure, and under the background of geopolitical risks, the decline may exceed Bitcoin.

Structurally, Ethereum was a "mining machine disk" in the early days, but now it has evolved into a "split disk", but the ecosystem lacks an effective reflow mechanism, and many Layer2s cannot form a positive cycle, resulting in the main disk being dispersed and the ecological vitality needs to be reactivated. Some sub-disks are recovering the ecosystem through new applications, but the overall structure is still partially scattered.

As for technical narratives, Ethereum has talked about chain narratives for many years, but what really brings user experience is a product that can be directly implemented. If the technical concept cannot be transformed into an intuitive experience, it will be difficult to continue to attract retail investors.

Therefore, Ethereum is still rebuilding itself, and a real breakthrough may take time to polish the structure and repair the narrative.

LEE CHAN: I think the index lags significantly in the increase in Ethereum’s rebound from US$1,400. The DeFi compliance and stablecoin narrative that only emerged after the rise is essentially the logic of chasing the rise. The current secondary market fluctuations are far greater than Bitcoin. Retail investors use leverage to participate easily due to severe retracement, which is difficult for short-term operations.

At present, there are not many new highlights in the Ethereum ecosystem. What is active are still old-fashioned projects, but they are not as good as Sol's new projects every day. I think the main driving force of this round still comes from institutions, including signals such as the fact that foundations no longer sell off and large funds entering the market. In the long run, I believe that in this cycle of Trump, Ether has the opportunity to hit a new high. If there is a copycat market in the future, the leading market is more likely to be Ether rather than Sol. The Sol market cannot drive market sentiment, and only Ether can drive overall recovery.

Henry: The recent rise in Ethereum is significantly driven by leveraged funds. Although the rise in open futures contracts reflects optimistic market sentiment, it is essentially an advanced reflection of price expectations, not a cash-out. The sustainability of this market depends on two points: one is whether the spot market funds can bear leverage selling pressure, and the other is whether the fundamentals can support the fulfillment of expectations. If such drives are lacking, the market may fall into a deep pullback or high volatility and fluctuation, making it difficult for retail investors to enter due to the difficulty of operation, which will weaken the market's belief in Ethereum returning to its peak. As a platform built on the Ethereum chain, our Hash Epoch focuses more on the deviation between on-chain activity and users’ expected behavior - leverage sentiment often amplifies users’ enthusiasm for event prediction.

Aaron: I think when the market rebounds, funds will always choose the direction with the least resistance to break through - when Ethereum falls to a historical low, the selling price-performance ratio is extremely low at this time, and once the buying orders are influx, it will form a strong rebound momentum. Regarding the open contract volume, since many media or institutions that have counted these data before have not put some small exchanges in it, the increase in the open contract volume actually represents some data corrections.

In addition, there are multiple driving factors for Ethereum's rise: the holding of the Consensus Conference significantly boosted market sentiment, and some funds with information advantages have been laid out in advance through high-leverage options strategies. The demand for off-market hedging caused by these option positions directly pushes up the open contract volume. These factors have contributed to the recent price trend of Ethereum.

Cynic: I think the core factor of this round of Ethereum rise is "experts' self-rescue" - early investors who held Ethereum at low prices have deep beliefs about it, but Ethereum may have some problems in the process of converting POS and promoting the upgrade of ZK and Layer2. From the perspective of market behavior, on the one hand, the foundation layoffs and accelerates the implementation of the project, it sends a positive signal. On the other hand, experts may even use micro-strategy and other operations to raise Ethereum by selling other assets, forming a "self-rescue" rise.

Judging from the trading data, the current open contract volume (OI) has not reached the sentiment high, but is a positive signal - there are still a large number of long orders under high capital rates, indicating that the real investment in the market has increased and contract trading is mobilizing the belief of retail investors. The short-term decline from US$2,800 is a black swan event impact, but the upward cycle of Ethereum has been opened, and this type of callback is actually an opportunity for those who miss the opportunity to get on the bus.

Question 2: How do you view the stock price plummeting after SharpLink submitted PIPE-related documents? What kind of inspiration does this event have for the future development of the market?

pepper Huajiao: I think the market's reaction to PIPE registration documents may over-interpret the risk of selling—When Joseph Lupin (CEO of ConsenSys) took office as chairman of the board of directors of SharpLink Gaming, the company immediately disclosed the relevant documents. This coincidence at the time point is indeed likely to trigger the expectation of selling.

Henry: Regarding the plunge in SharpLink's stock price, it actually seems to be a small company event on the surface, but what I feel is a deeper emotional change: traditional financial markets are becoming increasingly sensitive to on-chain data, especially changes in contracts and futures positions on Ethereum.

This shows that a trend - information on the chain will become an important variable in off-chain assets, and the disclosure of policies, finance or dynamic disclosure of positions will be regarded as important risk signals by the market. This is actually a key turning point for our Web3 platform.

LEE CHAN: Regarding the reasons for the pre-market plunge of this stock, I personally think that SharpLink is more like a strategy of counter-trading and reverse hunting, which may essentially be to cash out. Its substantial impact on Ethereum is actually not that great, far less than the power of micro-strategy that can trigger substantial buying.

After all, "first is first", MicroStrategies, as a pioneer, have established market confidence, while these later companies are more imitators and have limited influence.

Question 3: What is the next explosive track in the Ethereum ecosystem? What early stage projects are there to pay attention to?

Kiwi: I personally think that since last year's Devcon, Ethereum's innovation has actually stagnated. After Restaking, no particularly eye-catching new breakthroughs appeared. Although many concepts that have been optimized have been proposed recently and there have been progress in directions, these have actually been mentioned long ago, and there is no way to see what can be implemented and bring about changes.

As for market hotspots, like Arbitrum's recent Timeboost revenue performance is one of the rare highlights. But overall, these are not enough to support a big market.

So in the short term, I think the technical aspect of Ethereum is still relatively dull. What can really lead to breakthroughs depends on new trends, such as RWA (real world asset), which will indeed be of great help to Ethereum.

Henry: In my opinion, there are three directions for the next possible burst in the Ethereum ecosystem: first, it is a protocol with independent revenue capabilities on the chain; second, it is a decision-making infrastructure; third, it is the direction I am studying, the service layer that combines AI and smart contracts. These three directions have two common points: one is built on the "second curve" of Ethereum, and the other is to have verifiable on-chain revenue, which is particularly friendly to the current high interest rate environment, and has the ability to monetize.

For example, our platform Hash Epoch is connecting the Web3 community with content producers, allowing influential creators and KOLs to initiate topic predictions, and share income with users, truly realizing "view is value, content is assets."

Question 4: In the Ethereum ecosystem, are you more interested in the rise and fall of currency prices or are you more interested in the future construction of the Ethereum ecosystem?

Aaron: Based on the previous issue, there are three key trends in the current macro level of the crypto market worth paying attention to: First, the GENIUS Act will be voted by the House of Representatives on the 18th, which clears the obstacles for stablecoin compliance and will attract institutional funds to enter the market; Second, the Secretary of Finance predicts that the market value of stablecoin will increase from the current US$240 billion to US$2 trillion in 2028, and RWA is the core engine for achieving this growth. The winding of traditional assets such as stocks, oil, and gold will bring huge incremental funds to the crypto market; Third, although Solana is hot due to the MEME ecosystem, Ethereum is more likely to become the preferred platform for traditional institutions to deploy RWA with its infrastructure advantages. For example, Uniswap's UniChain is expected to become the largest broker on the chain, and AAVE may evolve into a central bank in the Web3 field, laying the foundation interest rate system in the industry.

In the long run, these layouts will continue to consolidate the fundamentals of Ethereum, especially forward-looking exploration in the RWA track, which may become an important growth pole to drive its development in the next four years.

pepper Huajiao: I think the key to restarting Ethereum at this stage lies in the RWA trend. Its essence is to solve the problem of capital retention through the "disk learning eight characters" logic - "cutting the head" to achieve forced locking with mechanisms such as staking and LST, "de-tailing" relies on delayed satisfaction and punishment mechanisms to constrain liquidity, while "intermediate flow" relies on capital retention designs such as compound interest rewards.

The failure of the DeFi nesting doll model in the past has led to the loss of support of the underlying logic of the Ethereum ecosystem; the split disc is also in a dilemma due to the lack of a sustainable hematopoietic mechanism. The rise of RWA provides another path - it has become a channel for cross-border capital flow by mapping traditional assets such as US stocks and real estate onto the chain, and with the help of Ethereum's decentralized characteristics. Especially for the rich in underdeveloped countries, this method is equivalent to bypassing the traditional financial system and converting assets into US dollars, thus allowing the crypto industry to return to Bitcoin's early anonymous payment and hedging logic on the "Silk Road".

Cynic: I think the core of the SharpLink incident is that everyone does not buy into its narrative. When the market is good, even if there is cash out operation, the market will be more tolerant; but now the overall situation is weak, and everyone in the altcoin sector is in danger, and it is easy to cause panic and selling when there is any turmoil. This is also the current dilemma of the copycat. In contrast, Bitcoin has "uniqueness" and everyone is willing to treat it as a safe-haven asset. But what about Ethereum? I think the gap between it and other counterfeits is not as big as expected in terms of market confidence.

Of course, Ethereum's biggest advantage at present is still DeFi and TVL, and there are no real opponents in the public chain. But the problem is that if traditional finance really wants to do RWA or on-chain finance, it may not be directly connected to Ethereum and may choose to issue chains on its own, which may not be a good thing for Ethereum in the long run.

However, at the current stage, Ethereum is still the biggest beneficiary of stablecoins and RWA narratives. If you look at the direction of the copycat, it is still the most worthy of attention to the main line.