Ethereum at $3K – Is ETH now overpriced or undervalued?

Danger property are caught between a market backside and a high.

From a technical perspective, this is sensible. Often, top-caps present a transparent directional bias after about 5 weeks of sideways buying and selling. What about this cycle although? The market is previous seven weeks, and there’s nonetheless no confirmed transfer.

Consequently, the stakes are rising as top-caps push deeper into leveraged liquidity. Nonetheless, Ethereum [ETH] seems to be caught in its personal inner tug-of-war. Notably, that $3k-level is now beginning to appear to be an actual take a look at.

ETH exhibits scalability positive aspects amid institutional headwinds

Little question, Ethereum flipped the script in This fall, posting -28.28% returns.

The truth is, this was ETH’s weakest quarter versus Bitcoin [BTC] because the 2019 cycle. Provided that backdrop, it’s not utterly unreasonable to see why some are calling Ethereum’s newest spherical of upgrades a “failure.”

Nonetheless, the on-chain knowledge tells a unique story. Good contract deployments on Ethereum simply hit a record 8.7 million, whereas common transaction charges dropped to round $0.17 – Marking an enormous shift from pre-upgrade ranges.

Supply: EtherScan

To place that into perspective, ETH charges spiked to almost $200 again in 2022. 

Since then, nevertheless, charges have stayed in a transparent downtrend, even after a leap to $8.48 following the October crash that triggered a market-wide liquidation occasion.

Positive, at first look, which may elevate scalability considerations. Nonetheless, the information steered in any other case. Ethereum lately hit 2.2 million daily transactions, displaying the community can push larger throughput with out kicking charges larger. Backside line? The upgrades clearly weren’t a failure.

And but, institutional flows are nonetheless leaning towards Ethereum.

Naturally, with fundamentals bettering however value motion lagging, the “undervaluation” case begins to make sense. Put merely, the market isn’t absolutely pricing within the “dip.” Nonetheless, what if establishments have a motive to remain out?

Ethereum’s technical setup faces overvaluation debate

On the technical facet, Ethereum has been displaying a textbook breakout setup.

ETH has been caught in a good $2.7k–$3.2k vary for the previous six to seven weeks. Even so, on-chain exercise like transactions and good contract deployments stays sturdy, pointing to a possible backside forming.

Value declaring although that ETH ETFs noticed $72 million in outflows, with all 9 funds promoting, capping off 2025 on a purple streak. Notably, this divergence has fueled an “overvaluation” debate, with some seeing ETH’s $3k-level as expensive.

Supply: SolScan

From an investor perspective, that argument can’t be ignored.

In line with the aforementioned chart, Solana [SOL] clocked 232 million in whole transactions, with about 25% non-vote transactions. Evaluate that to Ethereum’s 1.2 million, and SOL is clearly outperforming on-chain.

In the meantime, Bitcoin’s This fall outperformance retains it in its “digital gold” lane, with ETH nonetheless lagging. In essence, this market divergence is placing Ethereum’s relevance as a decentralized community underneath the microscope.

Towards this backdrop, the dearth of institutional flows isn’t a coincidence. 

As a substitute, it could mirror strategic investor reshuffling into Solana, with good cash viewing Ethereum as comparatively overpriced in comparison with sooner, extra scalable alternate options that additionally function a market hedge.

Ultimate Ideas

• File good contract deployments, low charges, and a couple of.2 million day by day transactions spotlight scalability positive aspects, whilst ETH struggles close to $3k.
• ETF outflows, SOL outperformance, and Bitcoin’s This fall energy recommend Ethereum could also be comparatively overpriced.