Two catalysts for Ethereum: why the drop in ETH is temporary, and what will bring back the bullish trend
Despite the recent decline in Ethereum's price, the asset's fundamental outlook remains extremely strong. My market analysis highlights two key catalysts that could radically change the current dynamics and return ETH to a growth trajectory. These are the upcoming technical network upgrade and growing institutional demand.
Glamsterdam: Return of Activity to L1
The first and perhaps most important catalyst is the Glamsterdam upgrade. It aims to bring a significant volume of transactions back to the Ethereum base layer (L1). Increased throughput and lower fees are expected to drive institutional settlements, tokenized real-world assets (RWA), and large DeFi operations back to the main network. Increased activity on L1 directly leads to higher fee collection, which in turn intensifies ETH burning. This could once again make the asset deflationary—a narrative that was a key driver of the previous rally.
Institutional Inflow: Staking and RWA
The second catalyst is the formation of sustainable institutional demand through staking ETFs and tokenization. These instruments not only open access to Ethereum for large capital but also create a supply-locking mechanism: a portion of coins goes into staking and is removed from circulation. Additionally, the growing RWA sector increases demand for ETH in multiple roles: as fuel for transactions, as collateral, and as a yield-bearing reserve. Major players such as BlackRock with the BUIDL fund, JPMorgan with a tokenized money market, PayPal with the PYUSD stablecoin on the ERC-20 standard, and Coinbase with the L2 solution Base are already actively building on Ethereum's infrastructure. If these institutions use the network, they have a direct incentive to also hold the asset that powers it.
Who Sets the Price of ETH?
It's important to understand that Ethereum's current pricing is determined not by retail traders, but by large institutional players. When they enter the market, they choose assets with the highest capitalization and reliability—BTC and ETH. Retail is just one element of the system, insufficient to drive significant price movement. Meanwhile, the network's fundamental metrics remain impressive: about $39.6 billion is locked in DeFi on Ethereum, the stablecoin volume on the network reaches $157 billion, and the active capitalization of RWA is around $14.9 billion. Daily, the blockchain processes over $1 billion in volume on decentralized exchanges and about $1.8 billion in perpetual contracts.
Expert Conclusion: The $10,000 target for ETH may seem distant amid the current correction, but in my view, the market will reach it much faster than most expect. The combination of a technical upgrade that will return activity to L1 and growing institutional demand creates a powerful foundation for a new bull cycle. The current weakness is, essentially, an accumulation phase before the next surge.