Ethereum (ETH) Price Prediction: Targeting $5,000 in 2025 as L2 Activity Grows

Ethereum has experienced a price correction after recently climbing above the $2,720 mark. The second-largest cryptocurrency by market cap is currently finding support above the $2,500 level

Ethereum (ETH) experienced a slight price correction after recently rising above the $2,720 mark. The second-largest cryptocurrency is now finding support above the $2,500 level as traders are evaluating optimal entry points.

As the price pulled back, it remained above the 100-hourly Simple Moving Average, indicating underlying strength despite the recent downturn.

Looking ahead, several catalysts could influence the future growth of the world’s second-largest cryptocurrency.

Technical Breakdown

Market analysts observed a short-term declining channel, potentially forming a bullish flag, with resistance at $2,630 on the hourly ETH/USD chart.

ETH began its upward movement by clearing the $2,620 resistance level, outpacing Bitcoin’s performance during this period. Bulls successfully pushed the price above $2,700, reaching a peak of $2,736 before the current correction phase began.

During the pullback, Ethereum dipped below $2,650 and briefly fell below the 50% Fibonacci retracement level calculated from the move between $2,415 and $2,736.

The price is currently facing resistance near $2,620, with additional hurdles at $2,680. Should ETH overcome the $2,720 level, the next target would be the $2,820 resistance zone.

A successful break above $2,820 could accelerate gains, potentially pushing toward $2,880 or even $2,950 in the short term.

Future Growth Catalysts

Some market analysts believe Ethereum could reach the $5,000 mark in 2025, which depends on several key developments.

The approval of in-kind ETF creation and staking options by regulators could attract institutional investment, which has been minimal so far. Recent data showed US-listed Ether ETFs experiencing net outflows of $4 million over a two-day period in mid-May.

The size difference between Ether ETFs and Bitcoin ETFs remains substantial. The Ether ETF market is currently about 92% smaller than Bitcoin’s $121.5 billion market, indicating ample room for growth if institutional interest increases.

Ethereum’s best scenario may involve limited competition in the ETF space, which would require the SEC to reject applications for other cryptocurrency ETFs.

The network’s recent Pectra upgrade has enhanced data transmission efficiency and scalability, laying the groundwork for increased usage. This technical improvement comes as layer-2 networks built on Ethereum show growing activity.

Layer-2 transaction volume rose 23% compared to the previous month, with Base network leading the way at 244.2 million transactions over a 30-day period.

Artificial intelligence applications may provide another boost for Ethereum. Observers have noted that AI tools like ChatGPT show preference for Ethereum’s layer-2 infrastructure when managing funds through multisignature contracts.

This AI connection could potentially increase smart contract activity significantly from current levels, supporting price growth toward new all-time highs.

Downside Scenarios

If Ethereum fails to break through the $2,630 resistance, further correction may occur. The first support level sits near $2,575, followed by a major support zone around $2,500.

Should the price drop below $2,500, the next support levels would be at $2,420, $2,350, and $2,320 respectively.

Technical indicators present a mixed picture. The MACD for ETH/USD is losing momentum in the bullish zone, while the RSI has fallen below the 50 level.

Trading volumes remain relatively stable during the correction, suggesting that panic selling has not materialized despite the price pullback.