Ethereum Price Falls below $2,400 as ETF Inflows and Upgrades Signal Long-Term Strength

Ethereum’s price declined by 4.6% over the past 24 hours, slipping below $2,438 as of early Friday, according to CoinMarketCap data. The pullback comes amid broader market weakness and renewed investor caution, though analysts say the underlying fundamentals for the world’s second-largest cryptocurrency remain robust.

Despite the price decline, Ethereum continues to attract strong institutional attention and is preparing for significant technical upgrades, both of which may act as stabilizing forces in the medium term.

Network Developments Point to Scalable Future

Following the successful deployment of the Pectra upgrade in May, which included improvements such as EIP-7702 (smart account support), Ethereum developers are now focusing on the highly anticipated Fusaka hard fork, expected later this year.

Fusaka will incorporate PeerDAS, a crucial data availability sampling protocol, and lay the groundwork for full danksharding—potentially increasing Layer-1 throughput by up to 10 times. Other elements, including Verkle Trees and the EVM Object Format, aim to improve contract efficiency and reduce validator storage requirements.

“PeerDAS is a foundational step toward Ethereum’s scaling roadmap. It could be transformative in enabling faster and cheaper transactions on Layer 1,” said Ethereum researcher Dankrad Feist.

Staking Mechanism Offers Built-in Support

Ethereum’s Proof-of-Stake system has introduced a dynamic pricing floor by making staking more attractive when prices fall. For every 1% drop in ETH price, staking yields increase by roughly 1.2%, incentivizing long-term holding. Currently, over 34.6 million ETH, valued at around $85 billion, is staked—offering built-in resistance against panic selling.

ETF Inflows Continue Despite Price Weakness

While ETH has declined in price, it continues to attract institutional capital through recently approved spot Ethereum ETFs. Over the past month, ETH ETFs have drawn more than $800 million in inflows, including more than $300 million into BlackRock’s ETHA fund just last week.

According to data from CoinShares, institutional funds now hold more than 3.3 million ETH, or roughly 3% of the circulating supply. Analysts believe that staking-enabled ETFs, if approved by the U.S. Securities and Exchange Commission (SEC), could lock up 5 to 8 million additional ETH, tightening supply and potentially providing upward price pressure.

“We’re seeing smart money quietly accumulate ETH, ahead of expected staking-enabled ETF approval,” said Ben Kurland, co-founder of DYOR Research.

Whale Concentration and Fed Policy Pose Risks

Despite bullish developments, Ethereum remains exposed to macroeconomic headwinds and liquidity risks. According to on-chain data, more than 82% of ETH supply is held by large wallets—making the market vulnerable to sharp selloffs should these entities move significant amounts of ETH to exchanges.

The U.S. Federal Reserve’s monetary policy also remains a key variable. While interest rates have held steady, any hawkish tilt or inflation surprises could dampen demand for risk assets like ETH, even amid favorable network trends.

Technical Picture Remains Bearish Near-Term

Ethereum is trading below major technical levels, including the 50-day Simple Moving Average (SMA) at $2,465 and the 200-day SMA at $2,608. The MACD histogram remains negative at –36.83, indicating persistent bearish momentum.

Support appears to be forming around $2,400, with resistance near $2,500–2,550. A decisive move in either direction could define Ethereum’s short-term trajectory.

Outlook: Short-Term Volatility, Long-Term Promise

Ethereum’s recent price dip reflects broader market sentiment, but the project’s fundamentals continue to strengthen. With critical upgrades scheduled for late 2025 and ETF demand growing, the underlying momentum could support a future recovery—provided macroeconomic conditions remain favorable.

Observers say the key catalysts to watch include: