Citigroup Warns: Ethereum Could Drop to $2,200 by Year-End

Ethereum (ETH) is currently holding above $4,500, but a new forecast from Wall Street giant Citigroup paints a more cautious picture. According to the bank, ETH could slide to $4,300 by year-end, and in a bearish scenario, it might even plunge to $2,200.

Citigroup Outlines Three Scenarios Bullish scenario: ETH could climb to $6,400 if inflows into ETFs continue and tokenization plus stablecoin adoption accelerate.Base scenario: ETH could fall back to around $4,300, slightly below current levels.Bearish scenario: Under unfavorable conditions, Ethereum could lose nearly half its value and drop to $2,200.

Network Activity as a Key Driver Citigroup emphasized that Ethereum’s network activity remains the primary factor influencing its valuation. Growth in Layer-2 solutions has increased overall usage, but only a fraction of that value flows back to the base layer. Citi estimates that just 30% of Layer-2 activity is reflected in ETH’s price. Analysts also pointed to Ethereum’s relatively smaller market capitalization compared to Bitcoin and its lower recognition among new investors as additional reasons why ETH could face downward pressure.

Why the Bullish Case Still Holds Weight Despite the cautious outlook, several factors support a potential rally: Recent inflows into Ethereum spot ETFs.Rising demand for tokenization and stablecoin applications.A supportive macro environment driven by expected Federal Reserve rate cuts.

Institutional Demand Remains Strong Institutional players continue to accumulate ETH. Strategic ETH Reserve now holds 4.99 million ETH worth over $22.6 billion. Meanwhile, Bitmine Immersion, backed by analyst Tom Lee, expanded its holdings by 82,000 ETH, pushing its total to 2.1 million ETH valued at $10.8 billion. Lee argued that Ethereum may enter a supercycle fueled by Wall Street demand and the convergence of AI and blockchain.

Market Snapshot ETH traded sideways over the past 24 hours within a range of $4,469–$4,542. Trading volume fell by 10%, signaling a mild cooling of investor interest.

Conclusion: Citigroup’s wide-ranging price targets highlight the uncertainty surrounding Ethereum. While bulls see potential for a surge toward $6,400, the bearish forecast of $2,200 is a reminder of just how volatile the asset remains.

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