Ethereum (ETH) is currently trading around $1,900, maintaining a consolidation phase below the significant psychological threshold of $2,000. This price action comes amid a notable adjustment in medium-term institutional expectations for the asset.
Standard Chartered Bank’s Global Head of Digital Asset Research, Geoffrey Kendrick, has revised the bank's earlier Ethereum price prediction for 2025. The updated forecast now sets a target of $4,000, a substantial reduction from the previously projected $10,000.
Understanding Standard Chartered’s Revised Ethereum Prediction
Standard Chartered’s analysis points to the growing influence of Layer-2 (L2) scaling solutions as a primary factor tempering its outlook for Ethereum's valuation. In a recent market report, analyst Geoffrey Kendrick elaborated on the reasons behind this downward revision.
The bank’s reassessment follows Ethereum's recent price decline, which saw it break below the $2,000 support level and touch multi-month lows. Kendrick anticipates that Ethereum’s market capitalization will face continued downward pressure through 2027, even if the price experiences near-term recoveries.
A core argument in the report is that Ethereum has undergone a form of "commoditization." As more user activity and transactions migrate from the main Ethereum blockchain (Layer-1) to Layer-2 networks, a significant portion of transaction fees is redirected away from Ethereum validators. This shift reduces the economic activity and fee revenue accrued to the base layer, which can negatively impact the value of ETH.
Kendrick specifically highlighted Coinbase’s Base blockchain as an example, estimating that it alone has diverted approximately $50 billion from Ethereum’s market cap. When users transact on these L2s, fees are paid to external entities rather than being burned or paid to Ethereum network participants.
The report further suggests that declining fee revenue could eventually force the Ethereum network to reconsider its issuance model to cover operational costs, potentially creating additional selling pressure on the asset.
One proposed, though unlikely, solution would be for Ethereum to implement a fee structure on Layer-2 networks themselves. Kendrick analogized this to a government imposing excess-profit taxes on mining companies. Without such a fundamental shift, the bank expects the ETH-to-BTC ratio to continue its downward trend.
Ethereum Price Analysis: Navigating Key Resistance
From a technical perspective, Ethereum continues to trade within a defined range, struggling to gain bullish momentum.
According to data from Coinglass, Ethereum futures saw $30.21 million in liquidations over a recent 24-hour period. Of this, long positions accounted for $15.77 million in liquidations, while short positions saw $14.25 million, indicating a tense battle between bulls and bears.
The premier altcoin has failed to reclaim the $2,000 level and break above a key descending trendline resistance, leading to a prolonged consolidation phase.
Key levels to watch:
- Support: The immediate support rests near $1,750. A break below this level could see ETH test the more critical support zone around $1,500.
- Resistance: The primary hurdle for bulls is the descending trendline. A decisive daily close above $2,200 is needed to invalidate the current bearish structure and could open a path toward $2,800.
Technical indicators are currently leaning bearish. Both the Relative Strength Index (RSI) and the Stochastic Oscillator are hovering below their neutral midlines, suggesting that selling pressure is dominant in the short term. For a trend reversal, ETH needs to overcome the aforementioned resistance with strong volume conviction. To explore more advanced on-chain metrics and real-time charting tools, you can view real-time analysis tools here.
Frequently Asked Questions
Why did Standard Chartered lower its Ethereum price prediction?
The bank revised its 2025 forecast from $10,000 to $4,000 primarily due to the economic impact of Layer-2 scaling solutions. These L2s divert transaction fees away from the Ethereum mainnet, reducing its fee revenue and potentially applying downward pressure on ETH's value long-term.
What is the main challenge facing Ethereum’s price?
The key challenge is overcoming significant technical resistance around $2,000 and a descending trendline. Furthermore, the fundamental shift of economic activity to Layer-2 networks presents a headwind for the mainnet's value accumulation.
What does Ethereum need to do to reverse the bearish trend?
From a technical standpoint, a daily close above $2,200 is crucial to signal a potential trend reversal. Fundamentally, the network may need to find ways to capture more value from the ecosystem of Layer-2 solutions built on top of it.
How do Layer-2 solutions affect Ethereum’s price?
While L2s enhance Ethereum’s scalability and user experience, they also redirect transaction fees to their own operators. This means less fee revenue is paid directly on the Ethereum mainnet, which can reduce the economic activity tied to the ETH asset itself.
What are the major support levels for ETH?
The most important immediate support level is near $1,750. A break below this could lead to a test of the stronger $1,500 support zone, which would be a critical area for buyers to defend.
Could Ethereum still reach $10,000?
While Standard Chartered's revised prediction is lower, long-term price targets always depend on numerous variables. A successful implementation of future network upgrades, increased adoption, or a change in how value is shared with the mainnet could alter the trajectory positively.