Ethereum is at a pivotal point as 2025 approaches, holding onto three major on-chain support levels that could determine its near-term price trajectory. Joao Wedson, Founder and CEO of Alphractal, highlighted the risks associated with a breakdown in these levels.
The first indicator, the MVRV Z-Score, shows that ETH is sitting on its last significant support before potentially more aggressive downside. If this level fails, selling pressure could intensify rapidly.
The second key metric, Market Cap Growth Rate, is also being tested. This measure reflects real expansion in ETH’s market capitalization. A breach here could signal that capital inflows are weakening, leaving the network vulnerable to further declines.
Lastly, the Delta Growth Rate, which tracks the divergence between Realized Cap growth and Market Cap growth, is approaching a critical threshold. Falling below this level would indicate speculative capital is exiting the network, raising the likelihood of a capitulation phase and pushing prices below $2,000.
For investors willing to take higher risks, current price points might still present tactical opportunities. However, from a broader perspective, ETH remains fragile. Any breakdown in these supports could trigger accelerated downside as supply pressures rise and demand falters heading into 2025.
Layer 2 Networks Boost Ethereum’s DeFi Ecosystem
Even in the face of potential low pricing in the short term, Ethereum remains the leading blockchain in DeFi. According to Leon Waidmann, Head of Research at OnchainHQ, one key thing to note in this regard is that the market share of its mainnet in total DeFi TVL remains around 64%, although this represents a considerable increase from the levels in 2022, when DeFi TVL in Ethereum’s mainnet was only 45%.
Adding Layer 2 networks such as Base, Arbitrum, and Optimism, Ethereum itself accounts for over 70% of TVL in DeFi. It’s clear that money is not leaving Ethereum; it’s clustering around it. More institutional money is being invested, and this development of Layer 2 networks reinforces Ethereum’s dominance of decentralized finance.
Ethereum presents a mixed picture in the current situation. Its share in the market and use in DeFi is still robust. However, certain on-chain metrics also point to a potential fall in prices, in case the major supports get affected.
Also Read: Ethereum Lags Behind Bitcoin as Past Cycle Pattern Repeats in 2025
