Recent Market Key Developments of Focus

Recently, discussions about Ethereum in the market mainly revolve around the following directions, including shifts in macro narratives and specific technological upgrades.

· Wall Street and Regulatory New Narratives
· Core Viewpoint: Some analysts believe that a new link is forming within the capital network between Wall Street and Washington: U.S. political and economic elites → U.S. Treasuries → stablecoins/crypto treasuries → Ethereum + RWA (Real-World Assets) + L2. The recent statement by the U.S. SEC Chairman about "the entire U.S. financial market potentially migrating on-chain in the coming years" reinforces this expectation.
· Impact Interpretation: This is seen as a strong structural bullish narrative, where assets from traditional financial systems (like Treasuries) are tokenized and ultimately settle on Ethereum and its Layer 2 networks, providing substantial value support.
· Fusaka Upgrade and Deflation Expectations
· Core Change: Ethereum's recent Fusaka upgrade aims to address the issue of L2 flourishing but L1 value capture being insufficient. The upgrade adjusts mechanisms to require L2 activities to pay minimum fees for data, with this portion of fees being burned.
· Key Data: Post-upgrade, Blob fees have become the largest contributor to ETH burning, accounting for up to 98%, with daily burns exceeding 1500 ETH. If L2 activity continues to grow, ETH may return to a deflationary state.
· Market Structure and Technical Signals
· Position Changes: Market data indicate that ETH holdings on exchanges are at historic lows, making up only about 10% of the total supply, suggesting limited potential selling pressure.
· Capital Sentiment: After market declines, the speculative leverage in the entire crypto market has dropped to historic lows (around 4%), indicating that market panic has been largely released. Meanwhile, the ETH/BTC exchange rate has been sideways since November, and the previously effective “long BTC/short ETH” trading strategy has recently become ineffective.

· Core Logic: The current active growth of Ethereum's Layer 2 networks (L2) and the transmission of value to the main chain are still uncertain. Although ETH ETFs have seen capital inflows, their scale and influence may be limited.

Overall, the current market sentiment towards Ethereum appears complex but cautiously optimistic:

· The bullish logic is mainly built on the grand narrative of “traditional finance going on-chain,” technological upgrades leading to value capture and a deflationary model, and a healthy structure after leverage deleveraging.
· The cautious or bearish viewpoints mainly focus on whether L2 growth's actual contribution to the mainnet's value can be validated and whether ETF capital inflows can be sustained.