Ethereum faces four determining factors that will condition its ability to begin a sustained bullish move before the end of 2025. The recent drop in on-chain activity, the collapse of fees, the translation of technical upgrades into value for holders, and the recovery of institutional interest are the elements that carry the most weight in the equation.
On-chain data shows a 23% contraction in transactions over a 30-day period and a 3% drop in active addresses, signaling lower dynamism on the base layer that can affect ETH demand. Meanwhile, competitors such as Tron, BNB Chain and Solana recorded transaction increases of at least 34% and active address growth of around 15% over the same period, putting pressure on Ethereum’s utility.
Economically, the transition to Proof-of-Stake changed ecosystem incentives. At the beginning of 2025, fees fell 88% from a peak of $70 million per week, reducing implied staking yields and degrading the incentive to lock up ETH. Staking, the process by which holders lock ETH to validate the network and receive rewards, was directly affected by this dynamic.
Network health and its impact on the price of Ether
On the technical front, the Pectra upgrade in May doubled blob capacity and reduced Layer-2 fees, while Fusaka promises additional optimizations to PeerDAS in December. However, experts warn that if these upgrades do not translate into clear benefits for holders, their bullish impact will be limited.
Institutional demand has proven to be a key catalyst: flows into institutional products drove a 140% increase over 100 days through August 9, 2024, pushing ETH up to $4,200. The subsequent correction to $3,200 left issuers and balances in negative territory, reducing willingness to accumulate.
The market will watch the implementation of technical upgrades and the sustainability of institutional flows as upcoming checkpoints. September 2025 is pointed to as a critical threshold around $4,500 that could determine whether consolidation turns into an uptrend or the sideways phase persists.
