Ethereum surged more than 6% in the past 24 hours, pushing the price above $3,300 and reaching a near three-week high of almost $3,400. The rally comes amid disappointing U.S. job data and expectations of looser monetary policy, which have bolstered short-term investor optimism. Over the past week, ETH has posted an 11.2% gain, reigniting bullish sentiment despite broader market uncertainties.
The recovery, however, masks an evolving story beneath the surface. Ethereum’s base layer activity has declined sharply while layer-2 networks continue to grow. According to Nansen, network fees on Ethereum dropped by 62% in November, a much steeper fall than the 22% decline seen on competing networks like Tron, Solana, and HyperEVM. This shift highlights the growing adoption of layer-2 solutions, with Base transactions rising 108% and Polygon activity up 81%, accelerated by the recent Fusaka upgrade that improved rollup efficiency and incentivized off-chain operations.
On the foundation layer, decentralized exchanges saw their weekly volume fall from $23.6 billion to $13.4 billion, and decentralized application sales hit a five-month low of $12.3 million. Total value locked on Ethereum’s base layer has decreased from $100 billion to $76 billion over the past two months, largely driven by declines in popular DApps like Pendle, Athena, Morpho, and Spark. Despite these drops, Ethereum maintains a commanding 68% share of the DeFi market, compared to Solana’s under 10%, reinforcing the network’s long-term advantage through scalable, layer-2 infrastructure.
Derivative markets reflect cautious optimism, with ETH perpetual futures funding rates steady at 9% annually, indicating balanced leveraged positions between buyers and sellers. Market watchers are also closely tracking macroeconomic signals, including 1.85 million U.S. layoffs in October, the largest since 2023, and anticipated Federal Reserve interest rate cuts, as these factors could continue influencing investor behavior.
Record inflows to exchanges are also attracting attention. On December 5, Ethereum experienced its largest Binance netflow since May 2023, with 162,084 ETH deposited at prices near $3,021. Large inflows often suggest holders are preparing to sell, raising the potential for short-term volatility depending on how these orders hit the market. Traders are monitoring order book depth and netflow patterns for signs of broader selling pressure or one-off movements.
Technically, Ethereum faces key resistance between $3,250 and $3,500, defined by its 50-day and 100-day moving averages, with the 200-day MA remaining higher. While the price has recovered from late November lows below $2,800, volume has declined during this rebound, suggesting cautious buyer participation. A failure to break above the resistance cluster could expose ETH to further downside toward the $2,800–$3,000 range, while sustained strength above $3,400 could pave the way to $3,800–$4,000.
Institutional catalysts may support Ethereum’s longer-term outlook. SEC head Paul Atkins recently highlighted that tokenization of U.S. markets could arrive in the next few years, emphasizing blockchain’s potential for transparency and predictable infrastructure. If realized, Ethereum could emerge as a primary platform for regulated digital assets, reinforcing its strategic importance in the evolving crypto ecosystem.
Looking ahead, Ethereum remains in a cautious yet constructive phase. Short-term volatility is likely, driven by both exchange inflows and technical challenges, but layer-2 adoption and institutional interest continue to position ETH as a resilient and scalable blockchain for DeFi and tokenized assets. Investors will be watching closely as the market tests critical levels that could define Ethereum’s trajectory for the coming months.
