74% of people believe that Ethereum will not break its historical high this year

Source: Talking about Li and Talking about the Outside

Looking back over the past few years, it seems that this cycle has little to do with most retail investors. The market is mainly driven by institutions, with whales and macro capital hoarding Bitcoin, while retail investors are still waiting for a comprehensive altcoin season that has yet to arrive. In front of retail investors, a massive influx of new altcoin projects continues to pour into the market, leading to oversupply due to large unlocks of altcoin tokens, a lack of sufficient new retail investors entering and taking over, and a clear lack of narrative and innovation in the crypto market…

In this cycle, Bitcoin's price has continuously broken historical highs, while Ethereum, the king of altcoins, has performed far below expectations. I remember in April, Ethereum dropped to around $1300, and the criticism of Ethereum online seemed never-ending. However, with a few big bullish candles in early May, ETH's price doubled in less than a month, and it seems that the criticism of Ethereum has lessened since then.

Today (June 10), ETH's price has returned to around $2700, and recent news regarding Ethereum seems to be continuously positive, such as:

1) Institutional Entry and Layout

In July last year (2024), the first batch of Ethereum spot ETFs officially began trading in the U.S., and BlackRock, the world's largest asset management company, was one of the more active applicants. Moreover, BlackRock submitted a revised S-1 filing last month (May) to add a physical redemption mechanism for the Ethereum ETF, with a final approval deadline of around October 11, 2025, for its Ethereum spot ETF (ETHA).

From the information currently available online, several institutions in the U.S. (such as Invesco and REX Shares) have also submitted applications to the SEC for Ethereum ETFs that support staking. If this is approved this year, it would mean that both institutions and retail investors (with some exceptions in certain countries) could earn an annualized staking yield of 3-5% without directly holding coins (through ETFs), which may further open the door for traditional capital to enter and lead the market to reassess ETH's value.

If you've been following various news recently, you might have noticed that some institutions are actively buying ETH. In the past 30 days alone, BlackRock has purchased about 220,000 ETH, as shown in the chart below.

Additionally, Galaxy Digital has withdrawn about 108,000 ETH from exchanges to wallets, Fidelity has bought about 30,000 ETH, SharpLink Gaming announced a $425 million financing to purchase ETH for reserves, and both SharpLink and Abraxas have made significant dollar investments (though the specific amount of ETH purchased has not yet been disclosed)…

Of course, institutions are profit-driven, and their ultimate goal is to make money. There may be deeper strategies involved, such as SharpLink Gaming's stock price rising nearly 40 times since announcing its financing to purchase ETH (from $2 in May to a peak of $80). This kind of strategy may also be emulated by more publicly traded companies in the future. Regardless of whether these companies choose BTC, ETH, or other potential altcoins, from a certain perspective, this is certainly a short-term positive for BTC and ETH prices, as they indeed bring capital and popularity to cryptocurrencies, either directly or indirectly.

2) Capital Flow into Ethereum ETFs

Since May, there has been a continuous positive capital inflow into ETH ETFs, with the inflow scale reaching $820 million in the last three weeks, reflecting that some funds are starting to become bullish on Ethereum's upcoming performance.

3) Continued Increase in On-Chain Activity

From the recent on-chain capital inflow situation, Ethereum's overall performance has begun to lead other chains, indicating that on-chain activity for Ethereum seems to be heating up. As shown in the chart below.

For instance, in just the last month (May), Ethereum's total transaction volume reached 42 million, marking the highest level since May 2021. As shown in the chart below.

At the same time, the fees generated on Ethereum last month reached $42.5 million, nearly double that of April. Additionally, the supply of stablecoins on Ethereum has reached $125 billion, setting a new historical high. As shown in the chart below.

4) Ethereum's Upgrades and Momentum

Although many people may no longer pay attention to the Pectra upgrade launched in May this year, this upgrade theoretically could significantly enhance L1 performance, reduce gas fees, and improve user experience.

From a longer-term perspective, this could also provide foundational support for future high-frequency application scenarios like AI and DeFi. Let the bullets fly for a while longer.

5) ETH/BTC Exchange Rate Issues

Currently, many people seem to be paying attention to the ETH/BTC exchange rate issue, as this rate is also one of the main reference indicators for observing altcoin trends. We have introduced this indicator in previous articles: if you notice that ETH starts to outperform BTC in terms of exchange rate value, it usually indicates a strong signal that market interest in altcoins is rapidly rising, and capital is flowing into altcoins in large amounts.

However, from the current trend, as shown in the chart above, in April this year, ETH/BTC had already dropped to its lowest point in six years, and at that time, the weekly RSI also hit a historical low. From the recent trend review, April should be the bottom, and it has started to reverse, but it seems there are still two key levels that need to be confirmed: one around 0.03 and the other around 0.045.

If ETH/BTC can successfully break through these two key level areas, then we can hope to see ETH's price break historical highs and reach $5000. Of course, this process may not be smooth sailing, as $2800, $3200, $3600, and $4000 are all important resistance levels that need to be broken through layer by layer (if they cannot be broken, it may face continued range corrections or volatile markets). Additionally, it is not ruled out that new black swan events may occur in the third quarter of this year, further delaying or ending the theoretical altcoin season. Therefore, whether we can see such opportunities before the end of this year remains to be seen.

Above, we have simply discussed Ethereum from five aspects. In short, overall, ETH still has certain potential and opportunities for long-term growth. As for whether the price can successfully break historical highs and reach $5000 this year (optimistically), we cannot predict. I remember in earlier articles (like in 2023), we speculated that ETH's price in this bull market could reach a maximum of $6000-$8000, but since the market is constantly changing, and many unexpected events have occurred in the market and macro environment last year and this year, our current discussion on price issues will be relatively conservative to avoid further criticism.

However, we might as well take a look at the prediction data from Polymarket. According to data from this platform, currently, only 26% of people are betting that ETH will break historical highs by the end of this year (strictly speaking, this refers to the funds betting in Polymarket, meaning 74% of the funds are betting that Ethereum will not break historical highs this year; using "people" is just for convenience in description). Although this is a significant increase from 11% in April, it is clear that people still seem skeptical about ETH breaking historical highs. As shown in the chart below.

At this point, it becomes interesting: do you plan to align with the majority opinion, or do you want to go against the grain when others are generally pessimistic? Or do you want to continue to wait and see for new opportunities in the next bear market?

But regardless of what investment decision you make, some core points of advice remain unchanged, such as those mentioned in our previous articles:

• Always maintain a certain level of liquidity (at least keep 10-20% of your position in stablecoins), and do not recklessly go all in.

• If you are keen on using leverage and engaging in contract trading, please be mentally prepared for the possibility of losing everything.

• When the market is rising, consider taking profits in batches; do not be overly greedy, and do not mindlessly chase bullish candles.

• When the market is falling, try to remain calm; do not panic excessively, as market crashes can sometimes present opportunities.

• Instead of envying others, learn to build your own network; practice DYOR (Do Your Own Research) and stay focused, as everyone is a different individual.

• Patience is key; reasonably understand your risk tolerance, plan your position ratios wisely, and always respond to the market with a position that makes you feel comfortable.