Ethereum Faces Near-Term Correction Risk After Brief Rally to $2,520

Ethereum's recent rally shows signs of fatigue as the cryptocurrency struggles to maintain levels above $2,500. After briefly clearing the $2,520 resistance, selling pressure emerged, with technical indicators pointing to a potential retracement toward the $2,320 support level. The breakdown of a bullish trend line at $2,450 on hourly charts further signals weakening momentum, suggesting a near-term correction may be imminent. Market participants are closely watching these key levels as Ethereum's price action could determine its short-term trajectory.

Ethereum Price Faces Near-Term Correction Risk After Brief Rally

Ethereum's recent upward momentum shows signs of fatigue as the asset struggles to maintain levels above $2,500. The second-largest cryptocurrency by market cap briefly cleared the $2,520 resistance before encountering selling pressure, with technical indicators suggesting potential retracement to $2,320 support.

The breakdown of a bullish trend line at $2,450 on hourly charts signals weakening momentum. Market participants now watch the 100-hour moving average NEAR $2,400 as critical support. A sustained hold above this level could pave the way for another test of resistance at $2,500, while failure may accelerate declines toward the $2,320 zone.

Trading activity on Kraken shows ETH rebounding from the 23.6% Fibonacci retracement level of its recent rally from $2,114 to $2,520. The 76.4% Fib level of the previous downtrend from $2,569 now serves as potential resistance if buyers regain control.

Ethereum ETF Inflows Surge Amid Cautious Futures Market Sentiment

Ethereum's Q2 rally, which saw ETH prices double from $1,400 to $2,800, has lost momentum despite record-breaking institutional demand. U.S. Spot ETH ETF net inflows reached $564 million in May and surpassed $1 billion in June, yet speculative interest remains tepid as prices fluctuate between $2,300 and $2,800.

Derivatives data reveals a troubling disconnect: Open Interest (OI) peaked at $41 billion during the rally but has since contracted by $10 billion, dragging ETH prices down to $2,100 before a partial recovery. The Options market echoes this caution, with 25 Delta Skew indicators signaling bearish mid-term sentiment.

Paradoxically, ETH ETFs continue attracting capital—$232 million flowed in this week alone—creating a potential buying opportunity if historical SOPR signals repeat. The market now faces a critical juncture: will institutional demand overcome weak speculative conviction?

Ethereum Network Activity Grows Despite Range-Bound Price Movement

Ethereum's price remains range-bound near $2,420 as spot and derivatives markets show muted activity. Investors have pulled back on trading, with daily profits and losses staying below $100 million. Whale holdings of 10,000-100,000 ETH saw only a marginal 7,000 ETH increase this week.

Network activity tells a different story. Transaction counts surged from 1.23 million to 1.75 million on Wednesday, fueled by growing active addresses. This divergence between price stagnation and network vitality presents an intriguing market dynamic.

The $2,500 level continues to act as resistance, with ETH facing rejection after forming an inverted hammer pattern. Early Friday trading saw a 1% dip as market participants maintain cautious positions.

Layer-2 Tokens Show Signs of Overvaluation Amid Ethereum Scalability Push

Ethereum's scalability challenges continue to fuel the Layer-2 ecosystem, with Vitalik Buterin's updated roadmap emphasizing enhanced security and performance for these solutions. However, recent data reveals concerning valuation disparities among leading L2 projects.

Arbitrum One dominates with $19.5 million in annual fees, followed closely by Optimism at $18.3 million. Starknet and zkSync trail significantly, generating just $600,000 and $1.3 million respectively. The fee gap highlights uneven adoption across the L2 landscape.

More startling are the Fully Diluted Valuation metrics. Arbitrum trades at 137.8x fees, Optimism at 205.7x, while Starknet commands a staggering 4,204x multiple. These figures dwarf traditional market benchmarks - Tesla's P/E ratio sits at 187x, the S&P 500 averages just 29x.

'This makes L2 tokens overvalued by a lot unless we expect their adoption and fees to pick up,' observes Ignas, whose analysis sparked the valuation debate. The data suggests investors are pricing in exponential growth that may not materialize across all Layer-2 solutions.