Andre Cronje, co-founder of Sonic Labs, attributes Ethereum’s recent price decline to internal network issues and increasing competition. The fragmentation of liquidity due to Layer 2 projects and the diminishing user experience caused by centralized aggregators are adversely affecting ETH’s performance. Meanwhile, alternative networks such as Solana 
$94, Tron, and XRP are intensifying competition with their speed and user-friendly infrastructures. While there are warnings that ETH could dip below $2,000, it’s essential for traders to reassess their strategies.
Layer 2 Challenges and Internal Issues
Cronje pointed out that one of the main reasons behind Ethereum’s lackluster price performance is its Layer 2 solutions. Although these projects are designed to alleviate the transaction load on the network, they lead to liquidity being dispersed across different layers. Users are now compelled to hold their funds across multiple layers, increasing transaction costs and complexity. Moreover, the use of centralized aggregators undermines the network’s claim of decentralization.
Another factor contributing to ETH’s recent decline is the short-term pressure on assets. The sale of ETH used as collateral during periods of liquidity crunch adds additional pressure on prices. Cronje emphasizes that this situation has become more pronounced in volatile market conditions.
Growing Competition from Alternative Networks
Technical shortcomings and an unclear roadmap are steering developers toward alternative blockchains. Cronje highlights that Solana’s fast transaction speeds, Tron’s low costs, and XRP’s enterprise-focused infrastructure have made these networks attractive to investors. The improvements in user experience provided by these networks may lead to faster adoption compared to Ethereum 
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AAPLAs competition heightens, Ethereum must innovate to maintain its market share. However, the network’s slow progress in scalability and user-friendly tools has become a focal point of criticism. Analysts believe that the preference of next-generation projects for other networks over Ethereum could jeopardize ETH’s long-term value.
