Ethereum Price Forecast: DeFi founder says L2 roadmap is like “band-aid” and limits ETH value accrual

Ethereum price today: $3,140

• Ethereum L2 roadmap hinders composability and limits ETH value accrual, says DeFi founder.
• Options data shows Ethereum traders expect short-term volatility but maintain a long-term bullish bias.
• Technical indicators suggest dominant bearish momentum as ETH continues to attempt a recovery above $3,200.

Ethereum (ETH) trades near $3,140 on Tuesday as it looks to attempt a recovery from the recent DeepSeek-triggered market decline. While traders are positioning for short-term volatility, a decentralized finance (DeFi) founder weighs in on Ethereum's Layer 2 roadmap.

Ethereum Layer 2 roadmap is "more of a band-aid," says DeFi founder

Despite the recent downturn triggered by DeepSeek, ETH has been suffering from negative sentiment in the past week due to community members' criticisms of the Ethereum Foundation's (EF) leadership structure and rollup-centric or Layer 2 roadmap.

Michael Egorov, founder of decentralized exchange Curve Finance, echoed a similar sentiment in a note shared with FXStreet. Egorov said that L2s are "more of a band-aid [...] and temporary solution than something to build a sustainable strategy on."

He highlighted that the rollup roadmap hinders composability and "leaks" most of ETH's value to L2 tokens and the companies operating them.

"While ETH can still accrue value, this leakage would considerably hamper Ethereum's potential. In a world where L2s dominate, ETH might hit $10K in value," wrote Egorov. "But a unified Ethereum that scales cohesively through L1 could potentially have orders of magnitude larger value."

Meanwhile, in its daily market insight shared with FXStreet, Sean Dawson, Head of Research at derivatives exchange Derive, said the recent ETH downturn sparked a surge in the ETH options market with 1-day at-the-money (ATM) implied volatility (IV) rising from 67% to 93%.

Dawson noted uncertainty in the traditional markets — which has been showing a correlation with cryptocurrencies — is pushing traders to hedge their positions with puts.

"The large inflows into options and the overall rise in volatility suggest that traders expect market conditions to remain unpredictable in the short term. But longer-term, the sentiment is holding steady, with calls still dominating the market for ETH despite the recent pullback," wrote Dawson.

"Given the close market correlation with US equities, the next couple of months will likely remain volatile, as investors digest broader macroeconomic factors alongside crypto's evolving narrative."

Ethereum Price Forecast: Technical indicators suggest prevailing bearish momentum

Ethereum sustained over $48.25 million in futures liquidations in the past 24 hours, per Coinglass data. The total amount of liquidated long and short positions is $14.55 million and $33.70 million, respectively.

ETH is attempting to reclaim the $3,200 support level after the market-wide bearish pressure on Monday, which saw its price briefly touch the psychological level of $3,000. If ETH reclaims $3,200, it faces another hurdle at the descending trendline resistance of a right-angled triangle pattern. ETH has to overcome this resistance to resume its uptrend.

ETH/USDT daily chart

However, if ETH continues seeing a rejection at $3,200, it could breach the $3,000 level to find support near the $2,817 critical support level that bulls held for four months — from April to July 2024.

The Relative Strength Index (RSI), Stochastic Oscillator (Stoch) and Moving Average Convergence Divergence (MACD) technical indicators are below their neutral levels, indicating dominant bearish momentum.

A daily candlestick close above $4,100 will invalidate the thesis.