Ethereum is being tested around the $3,000 mark as on-chain data shows strong network expansion, but institutional money flows remain in the opposite direction.
After weeks of sideways market movement, risky assets are stuck between potential "Dip" and "tops." With Ethereum, the paradox lies in the fact that network efficiency has clearly improved, but price and cash flow, particularly through crypto ETFs, Unconfirmed a breakout trend.
- Ethereum has set records for smart contract deployment and dramatically reduced transaction costs, reflecting improved scalability.
- ETH has been trading sideways between $2,700 and $3,200 for several weeks; the $3,000 mark has become a crucial testing ground for the next trend.
- Institutional capital outflows through Ethereum ETFs have been net, while Solana and Bitcoin have a relative advantage, sparking debate about "overvaluation".
Ethereum improves scalability but faces institutional headwinds.
on-chain data shows Ethereum experiencing a significant increase in throughput and a decrease in fees, although price performance and institutional inflows remain weak, making the $3,000 mark a psychological test.
In terms of performance, Ethereum recorded a loss of -28.28% in Q4, described as ETH 's weakest quarter compared to Bitcoin since the 2019 cycle. This context has led to some skepticism about the effectiveness of the network's recent upgrades.
However, on-chain data suggests a different trend. The number of smart contract deployments on Ethereum just reached a record 8.7 million. Simultaneously, the Medium transaction fee has dropped to around $0.17, indicating a significant change from the pre-upgrade period.
For comparison, ETH fees surged to nearly $200 in 2022. Since then, fees have maintained a downward trend, although there was a brief rebound to $8.48 after the October crash that triggered a market-wide liquidation event.
In terms of throughput, the network recently reached 2.2 million transactions per day . This shows that Ethereum can handle higher volumes without a corresponding increase in fees, thus reinforcing the argument that the upgrades are not "failures".
However, institutional cash flow is still not in the right direction. When the network infrastructure improves but the price doesn't reflect it, the "undervalued" argument emerges. Conversely, it's also possible that the organization has strategic reasons for staying out, rather than simply missing out on the opportunity.
ETH 's technical setup is sideways, with the $3,000 mark acting as a test area.
ETH has been consolidating within a narrow range of $2,700–$3,200 for 6–7 weeks, forming a pattern resembling a breakout setup, but with no confirmed direction yet.
From a technical perspective, Ethereum is described as forming a breakout setup . Although the price has been stuck in the $2,700–$3,200 range for weeks, on-chain activity indicators such as trading and contract deployments remain strong, often suggesting the possibility of a Dip forming.
With the overall market experiencing a sideways trading phase lasting over 7 weeks without clear direction confirmation, top-cap stocks may push deeper into leveraged liquidation zones. For ETH specifically, this makes the $3,000 mark look like a true test of supply absorption capacity and investor confidence.
Weakening Ethereum ETF Capital spark debate over "overvaluation".
The Ethereum ETF recorded net outflows of $72 million, creating a divergence from on-chain data and fueling debate that the $3,000 range may be "expensive" in the eyes of institutions.
According to cash flow data, Ethereum ETFs recorded a net outflow of $72 million, with all nine funds selling off. This development adds to a chain of negative signals regarding Capital flows towards the end of 2025.
The divergence between network activity and ETF inflows has fueled the “overvaluation” debate, with some XEM the $3,000 mark as no longer a cheap price. This discussion is evident in public exchanges related to the overvaluation argument.
From an investor's perspective, this argument is noteworthy because institutional capital flows often reflect priorities regarding risk, liquidation , and relative performance within the same crypto asset class, especially when the market is still in a stalemate.
Solana stands out in terms of operations and is likely to attract restructuring funding.
A portion of the Capital flow may be shifting to Solana as its performance metrics and "speed, scalability" narrative put ETH at a disadvantage in the short term.
According to the chart mentioned in the original content, Solana recorded a total of 232 million transactions, of which approximately 25% were non-"voting" transactions. This figure is compared to Ethereum's 1.2 million, thus reinforcing the view that SOL is outperforming Ethereum in terms of on-chain activity in this comparison.
Meanwhile, Bitcoin continued to demonstrate strength in Q4 and maintained its status as "digital gold," making ETH appear less prominent in terms of relative performance. As this disparity persists, Ethereum's Vai and valuation as a decentralized network continue to be scrutinized.
In this context, the lack of institutional Capital inflows into ETH may not be coincidental, but rather reflect portfolio restructuring. Flow tracking data also shows attention being paid to Solana, as investors seek a “fast, scalable” option as a form of hedge in the crypto market, as evidenced by the Solana-related flow aggregator.
Conclusion: Network data is positive, but the price still faces the cash flow challenge.
Ethereum is showing signs of improving usage with record contract deployments, low fees, and 2.2 million transactions per day, but pressure from ETFs and ecosystem competition makes the $3,000 level a key point.
on-chain indicators support the argument that the upgrade has made Ethereum more efficient: smart contract deployments have reached record levels, Medium fees have decreased, and throughput has increased without driving up fees. This is the positive "data" that could support the long-term narrative.
Conversely, the financial markets are reflecting caution: Ethereum ETFs are experiencing net outflows, valuation debates are swirling around $3,000, and unfavorable comparisons to Solana in terms of performance. Until these pull factors are resolved, ETH may remain stuck in consolidation rather than breaking out decisively.
Frequently Asked Questions
Why is the $3,000 mark for ETH considered a crucial "test"?
Since ETH has been trading sideways between $2,700 and $3,200 for several weeks, $3,000 is near the center of the accumulation zone and often becomes a psychological milestone. When the price approaches this level, the supply-demand reaction and liquidation could determine whether the price breaks out of the range or returns to sideways trading.
What data shows that Ethereum has improved scalability?
Three key highlights are: a record 8.7 million smart contract deployments, an Medium transaction fee of approximately $0.17, and a network handling 2.2 million transactions per day without a corresponding increase in fees.
What does the $72 million net outflow from the Ethereum ETF mean?
Net outflows reflect weakening investor demand through ETFs during that period. When this occurs simultaneously with improving on-chain data, the market may XEM it as a signal that institutions are not yet ready to revalue ETH, or are prioritizing other assets/ chain .
Why is Solana being mentioned as an alternative that leads to comparisons with ETH ?
Because the transaction figures cited show Solana achieving 232 million total transactions (approximately 25% non-vote), while Ethereum is placed next at 1.2 million in that comparison. This difference strengthens the narrative that SOL is strong in terms of speed and activity.
