BTC recently surged to $120,000 and enjoyed its moment of glory, but ETH, the market's number two, has become the true underperformer. Over the past month, ETH has been grinding below $3,000, and even dipped below the $2,900 mark today. The decline may seem modest, but the underlying issues deserve deeper scrutiny.

**Leverage Games Are the Root Cause**

ETH always lags in rallies but crashes hard in downturns—this is the classic behavior when leveraged capital dominates the market. Through this 2025 cycle, ETH has already experienced two halvings in value, with futures contract volumes hitting record highs. The spot-to-futures ratio has compressed to 0.2, which means what? The market's price discovery mechanism has been completely hijacked by leveraged funds. Any slight disturbance—such as a top institution dumping $200 million in spot positions—triggers a market-wide collapse.

**Institutions' Dual Personas**

Interestingly, some Wall Street analysts publicly proclaim "ETH is severely undervalued," while their internal reports privately suggest a possible drop to $1,800 in the first half of 2026. This operation is quite sophisticated—maintaining an optimistic narrative externally while preparing defensive strategies internally for clients. The result is that publicly listed companies with large ETH positions significantly underperform relative to their actual holdings.

In the short term, this situation is difficult to reverse. Leverage risks continue to accumulate, institutional true positions remain cautious, and the market needs time to digest these contradictions.