Ethereum's recent market performance is quite interesting—short-term pressure is significant, but the long-term fundamentals are actually strengthening.

Let's start with the price aspect. This week, Ethereum broke below the key support level of $3,000, with a 24-hour decline of nearly 5%, reaching a low of $2911.78. The reasons behind this are quite clear—there are diverging expectations from the Federal Reserve regarding interest rate cuts, combined with net outflows from ETFs during this period, and the typically quiet trading around Christmas. All these factors together pushed the price downward.

But there's a turning point here. Infrastructure development in the ecosystem has not slowed down. Layer2 solutions now account for over 70% of the total ecosystem traffic, with leading projects like Arbitrum and Optimism still leading in TVL, and institutional interest remains high. Giants like BlackRock are holding steady, and the total institutional holdings have already surpassed $10.2 billion.

More importantly, the Fusaka upgrade has been successfully implemented, and staking offers a stable return of 4%-7%. This provides solid long-term value support. So, while there are short-term fluctuations, the underlying ecosystem prosperity might be masked by the recent market volatility.