Ether May Struggle to Deliver Meaningful Rallies in 2025 According to 10x Research

As we step into the new year, investors are eagerly awaiting the potential performance of various cryptocurrencies, including Ethereum (ETH). However, not all analysts are bullish on ETH’s prospects for a bull run in 2025. According to Markus Thielen, 10x Research’s head of research, Ether might not be the wisest investment choice, as it may deliver underwhelming returns compared to Bitcoin.

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A Disappointing Outlook

Thielen shared his concerns in a December 30 market report, stating that while Ethereum’s volatility is appreciated, it remains a poor medium-term investment. He expects ETH to underperform BTC once again in 2025, and his stance on Ethereum is clear: "avoid."

One of the most crucial metrics Thielen highlighted for 2025 will be the trend in active validators. The growth rate of validators has turned negative over the past 30 days, dropping by about 1%. This raises concerns about the increasing risk of more validators exiting the network.

Lack of Demand and a Declining Validator Count

Thielen argued that Ethereum lacks "real demand" outside of staking. He believes that a rise in unstaking is logical, which could have negative implications for the network’s overall health.

However, not all analysts share this pessimistic view on ETH. Attestant’s chief business officer, Tim Lowe, recently told Cointelegraph that demand for Ether can easily increase with refined marketing and a unified value proposition. He sees diversification from Bitcoin as a simple catalyst for Ethereum.

A Comparison of ETF Inflows

The data on ETF inflows provides an interesting perspective on the performance of ETH compared to BTC. While Bitcoin saw $35.3 billion in inflows across 2024, Ether’s ETFs reached only $2.66 billion. This disparity suggests that investors may be hesitant to invest in ETH.

The Impact of Upgrades

Thielen is also skeptical of the upcoming Pectra upgrade, which is set to be introduced in early 2025. He notes that out of the 19 upgrades so far, only two have had a notable positive impact on price, and even those occurred during Bitcoin bull markets.

The Duncan upgrade in March reduced gas fees and allowed the network to handle more transactions but arrived six months too late. Thielen believes it missed the peak of the memecoin rally and the market shifted to Solana (SOL), which was seen as a more cost-effective alternative.

A Rangebound Market

Pseudonymous crypto trader Cold Blooded Schiller shared his analysis in an X post, stating that Ether has been rangebound since December 25. He believes one of two scenarios is likely to play out: either ETH stages a "sweep and run" to the upside, triggering a price breakout, or it breaks down to the December 20 range low, potentially retesting the $3,000 level.

Another pseudonymous trader, Dal, echoed a similar scenario. He stated that Ether could go in one of two directions: if it can flip $3,554 and go back to $4k, then ETH might be able to break out; otherwise, it could sweep $3,102.

A Bullish Outlook

However, not all analysts share the pessimistic view on ETH. MN Capital founder Michael van de Poppe is more bullish on Ether and said it is showing signs of breaking out relative to Bitcoin in January 2025. He stated that he wouldn’t be surprised if $ETH / $BTC breaks through 0.04 in January.

Conclusion

While some analysts are skeptical about Ethereum’s potential performance in 2025, others believe the asset still has room for growth. The future of ETH remains uncertain, and investors should approach with caution.

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