Key Recent Market Events

Recent discussions about Ethereum mainly focus on the following directions, covering changes in the macro environment and the impact of specific technical updates.
· Wall Street and New Regulatory Narratives
· Main viewpoint: Some analysts believe that a new chain of capital networks has formed between Wall Street and Washington: US political and economic elites → US Treasuries → Stablecoins/Crypto Wallets → Ethereum + RWA (Real Assets) + L2. Recent statements by the SEC chairperson about the US financial market migrating to blockchain in the next few years have reinforced this expectation.
· Impact analysis: This is seen as a strong structural bull narrative, as traditional financial assets (e.g., US Treasuries) could ultimately be tokenized and accumulated on Ethereum and its Layer 2s, creating a strong value support.
· Fusaka Upgrade and Deflation Expectations
· Main change: The recent Fusaka upgrade on Ethereum aims to address the issue of insufficient L1 value in L2 development. The upgrade introduces a mechanism that incentivizes L2 activity to pay minimum data fees, part of which is burned.
· Key indicators: After the upgrade, Blob transaction fees become the largest contributor to ETH burning, accounting for up to 98%, with over 1500 ETH burned daily. If L2 activity continues to grow, ETH could enter a deflationary state again.
· Market Structure and Technical Signals
· Position changes: Market data shows that ETH holdings on exchanges are at historic lows, about 10% of the total supply, indicating potential selling pressure is relatively small.
· Market sentiment: After a market downturn, the speculative leverage in the cryptocurrency industry has fallen to historical lows (e.g., 4%), indicating that panic has been fully released. Meanwhile, ETH/BTC has been consolidating since November, and previous strategies of “long BTC/short ETH” have lost effectiveness.
· Core Logic: Currently, the rapid growth of Ethereum (L2) and its impact on the main chain remain unclear. Although capital flows into ETH ETFs, their scale and influence may be limited.
Overall, market sentiment towards Ethereum remains complex but generally optimistic:
· The main bull scenario is based on the overarching narrative of “traditional finance on-chain,” value capture from technical upgrades, deflation models, and healthy structures after leverage positions exit.
· Bearish or cautious assessments are related to the actual value of L2 growth and the uncertainty about the duration of ETF capital inflows. $ETH