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The altcoin market’s compass, Ethereum (ETH) 
$2,531, has become a subject of jest among traders. Since December 2021, ETH has lost 77% of its value against Bitcoin 
$104,992, turning into a disappointment for short-term profit-seeking investors. However, this dramatic decline does not imply that Ethereum should be disregarded. On the contrary, some investors believe that positive signals are sprouting amidst such pessimism.
ETH/BTC Trading Pair Dips, Criticism Intensifies
Ethereum’s long-term decline against Bitcoin presents a frustrating picture for many investors. Since reaching a peak of $4,760 in November 2021, there has been neither a significant recovery against the dollar nor a halt to the decline against BTC. Ethereum is increasingly perceived as a “shitcoin” that is being mocked by some investors, with many small-cap altcoins reportedly outperforming it.
Various factors are cited as reasons for this decline. Key issues include Layer-2 solutions attracting users and investors away from ETH, complex updates scaring off investors, high transaction fees, and slow improvements. Additionally, regulatory uncertainties have diminished Ethereum’s appeal, placing faster altcoin projects like Solana 
$145 and Cardano 
$0.632213 in the spotlight. The identity crisis stemming from Ethereum being neither a complete altcoin nor a leading coin, coupled with Bitcoin’s straightforward investment narrative, has resulted in continuous selling pressure.
Ethereum Remains Robust Despite Setbacks
Despite this bleak outlook, Ethereum’s situation does not warrant its complete dismissal. The project’s technical and structural development continues to demonstrate its leading position in the industry. The transition to the Proof of Stake system implemented during the 2022 Merge update significantly reduced the network’s energy consumption by 99.9%, yielding a substantial environmental benefit. The subsequent Shapella update allowed for the withdrawal of staked ETH, greatly enhancing liquidity.
Development activities on Ethereum continue unabated. Scalability solutions like Proto-Danksharding (EIP-4844) have made Layer-2 solutions cheaper and reduced network congestion. Additionally, Layer-2 projects such as zkSync, Arbitrum, and Optimism are expected to surpass the main network in daily transaction volume by the end of 2023. These advancements illustrate that Ethereum remains one of the most technologically advanced altcoin projects.
Market Pessimism Could Signal a Positive Turnaround
According to Santiment, Ethereum has been the seventh most developed cryptocurrency in the last 30 days. Moreover, the vision and infrastructure that Ethereum has provided over time still form the foundation for many new projects. The growth of liquid staking solutions on platforms such as Lido Finance, Rocket Pool, and Coinbase expands Ethereum’s decentralization understanding.
Furthermore, updated versions of leading DeFi protocols like Uniswap, Aave, and Curve continue to operate on the Ethereum network. With social protocol projects like Farcaster and Lens, Ethereum is no longer limited to DeFi and NFTs. Taking all these developments into account, despite its weak price performance, Ethereum possesses a robust ecosystem.
The level of pessimism surrounding ETH in the market is, however, seen by some investors as a potential recovery signal. Markets often trend contrary to the prevailing expectations of the crowd. Ethereum’s current position may indicate that the price decline is nearing its end.
