Ethereum Reclaims $2,100 as Vitalik Buterin Pivots Toward Layer 1 Scaling Solutions

On Monday, February 10, 2026, the Ethereum (ETH) market experienced a notable, albeit partial, recovery as the asset's price climbed back to the $2,100 threshold. This upward movement followed a grueling nine-day period during which the second-largest cryptocurrency by market capitalization suffered a staggering 43% decline. The asset hit a local bottom of $1,750 on the preceding Friday, marking its lowest valuation since April 2025. Although the subsequent 22% bounce from those lows provided a glimmer of hope for bullish traders, the broader market sentiment remains largely subdued. This lack of conviction is clearly reflected in the derivatives market, where one-month ETH futures are currently trading at a premium of just 3%—a figure that falls significantly short of the 5% level typically required to signal a neutral or healthy market environment.

The shifting dynamics of Ethereum's supply have also become a focal point for market participants, many of whom are expressing frustration over the weakening of the network's once-celebrated deflationary mechanism. Over the last 30 days, the annualized growth rate of the total Ether supply has climbed to 0.8%. This represents a sharp departure from the near-zero inflation rates—and occasional deflationary periods—observed just one year prior. This inflationary trend is largely attributed to a decrease in demand for base-layer data processing. As network activity shifts or slows, the fee-burning mechanism, which is designed to remove ETH from circulation during periods of high demand, has become less effective, fundamentally altering the asset's economic profile in the eyes of investors.

Parallel to these market fluctuations, Ethereum co-founder Vitalik Buterin has introduced a strategic pivot that could fundamentally reorganize the network’s long-term development priorities. Buterin has begun to publicly question the long-standing commitment to a roadmap that prioritizes Layer 2 (L2) solutions above all else. His primary concern centers on the inherent difficulty of achieving meaningful decentralization within the current L2 landscape, which often relies on centralized "training wheels" or insecure multi-signature bridges for security. He highlighted sobering data from L2Beat, noting that by the beginning of 2026, the vast majority of the more than 50 major L2 networks have failed to reach even the second stage of decentralization, leaving them vulnerable to centralized points of failure.

In light of these concerns, Buterin has proposed a shift in focus toward scaling the Ethereum base layer (L1) directly. He pointed out that the mainnet has demonstrated higher-than-expected performance, successfully processing between 20 and 30 transactions per second while maintaining gas fees at a remarkably low level of under 2 gwei. This efficiency calls into question the necessity of L2s as the exclusive scaling engine, a role they were previously expected to fill as "branded shards" of the Ethereum ecosystem. Buterin now argues that L2 solutions should pivot away from simply providing extra throughput and instead focus on delivering unique, specialized value. This includes features such as enhanced user privacy, low-latency transaction sequencing, or the implementation of non-standard virtual machines that cater to specific use cases.

The co-founder's remarks have sparked an immediate and intense dialogue within the L2 development community. Steven Goldfeder, the co-founder of Arbitrum, was quick to defend the importance of scaling, warning that if Ethereum becomes perceived as "unfriendly" toward rollups, institutional investors and developers might migrate to independent Layer 1 blockchains. Karl Floersch of the Optimism Foundation took a more collaborative tone, welcoming the continued development of the modular L2 stack to support what he calls a "full spectrum of decentralization," while acknowledging that the industry is not yet ready for widespread stage 2 implementation. Jesse Pollak, the head of Base, also weighed in, agreeing that L2s should be more than just a "cheaper version of Ethereum" and characterizing the improvements in L1 scaling as a significant win for the entire decentralized ecosystem.

Despite these high-level discussions regarding the future of blockchain architecture, immediate technical indicators suggest that the market remains in a precarious position. Analysis of the four-hour chart reveals that the MACD and RSI are currently signaling only a corrective bounce rather than a sustained reversal of the downward trend. Furthermore, indicators such as the Chaikin Money Flow (CMF) and the Directional Movement Index (DMI) point toward a continued outflow of capital from the asset. These internal market pressures are being compounded by external macroeconomic factors in mid-February 2026. Rising geopolitical tensions between the United States and Iran, coupled with widespread anxiety regarding a potential "bursting" of the artificial intelligence investment bubble, have created a risk-off environment that has already triggered a significant cascade of liquidations across the crypto markets.