On October 31, 2024, Ethereum (ETH) experienced a price drop to $2,550 after reaching $2,700, its highest in ten days. This decline mirrored Bitcoin's (BTC) 4% drop from its peak of $73,575 on October 29.
Market analysts are questioning what it would take for Ether to reclaim the $3,000 mark, suggesting that reduced transaction fees, increased institutional adoption, and better staking incentives are crucial. Notably, Bitcoin ETFs recently attracted $3.3 billion in inflows, contrasting with the lack of interest in spot Ethereum ETFs.
Ethereum's market share is under pressure, with Solana surpassing it in decentralized application (DApp) transaction volumes. Nonetheless, Ethereum remains dominant in total value locked (TVL) at $48.8 billion, compared to Solana's $6.27 billion.
Despite a robust $116 billion in on-chain DApp volume over the past month, Ethereum's transaction fees have stagnated, leading to a net withdrawal of 180,000 ETH from staking. The current ETH staking reward rate stands at 3.4%, significantly lower than Solana's 6.5% and Tron's 4.5%.
To address these challenges, Ethereum developers are working on the Ethereum Improvement Proposal (EIP) 7742, which aims to introduce dynamic blob costs. Furthermore, the anticipated Pectra upgrade in Q1 2025 seeks to increase the maximum block size from 1 MB to 2.7 MB.
Ether's potential rise to $3,000 hinges on overcoming regulatory hurdles, particularly those imposed by the US Securities and Exchange Commission, which has rejected requests for spot Ethereum ETFs that utilize staking strategies. This scenario contrasts with Bitcoin's appeal to major investors due to its stringent monetary policy.
As Ethereum navigates these challenges, its future price rally may depend on significant structural changes within the network.