BTC recently surged to $120,000 and had its moment of glory, but ETH, the market's number two, has become the true passive player. Over the past month, ETH has been grinding below $3,000, and today even briefly broke through the $2,900 level. The decline doesn't look that significant on the surface, but the issues reflected behind it are worth examining deeply.

**Leverage was the culprit**

ETH's rallies are always sluggish, but when it falls, it drops like a stone—this is the typical behavior of a market dominated by leveraged capital. In this 2025 bull run, ETH has already experienced two halvings, futures market contract volumes hit record highs, and the spot-to-futures ratio has been compressed to 0.2. What does this mean? The market's price discovery mechanism has been completely hijacked by leveraged funds. Any slight disturbance—such as a major institution dumping $200 million in spot holdings—sends the entire market crashing.

**Institutions' dual personality**

Interestingly, some Wall Street analysts publicly tout that "ETH is severely undervalued," yet their internal reports privately hint that it could drop to $1,800 in the first half of 2026. This operating method is quite sophisticated—maintaining optimistic narratives externally while having clients prepare defensive strategies internally. The result is that listed companies with heavy ETH positions see stock performance far weaker than their holdings themselves.

In the short term, this situation will be difficult to reverse. Leverage risks are still accumulating, institutions' true attitudes remain cautious, and the market needs time to digest these contradictions.