Ethereum Reaches Nearly $4.2K Before Slight Retreat; Analyst Issues Caution Regarding High Purchase Prices
In the current bullish phase of Ethereum, some analysts are warning that entering the cryptocurrency at high price levels carries increased risks. However, the potential rewards are enticing, with Ethereum briefly surpassing $4,200 before retreating to around $4,100.
Michael van de Poppe, a well-known crypto trader and analyst, believes that Ethereum is forming a breakout and is headed towards new all-time highs. The Relative Strength Index (RSI) on the daily chart indicates strong buyer-dominant conditions, with a reading of 72. Closing above the $4,200 resistance on a weekly time frame could bring Ethereum close to breaching its all-time highs, last observed during the bull market a year ago.
For short-term returns during this bullish momentum, promising Layer-2 (L2) products to consider are Arbitrum, Polygon zkEVM, StarkNet, zkSync, and the emerging Layer Brett ($LBRETT) token. In Ethereum-based DeFi, Uniswap (UNI) and Chainlink (LINK) also present strong investment cases based on growth potential and ecosystem importance.
Arbitrum, the leading optimistic rollup with a market cap of over $1 billion, boasts high transaction throughput (~40,000 TPS) and over 600 integrated dApps. Polygon zkEVM uses zero-knowledge proofs for EVM compatibility, enabling lower gas fees and faster transactions, supporting broad DeFi adoption and developer migration ease. StarkNet offers scalability via STARK-based validity proofs, suitable for computationally heavy applications, while zkSync leverages zero-knowledge rollups to deliver secure, near-instant transactions. Layer Brett ($LBRETT) is a newer L2 Ethereum-based token with high staking yields and presale momentum, positioning it as a high-risk, potentially high-reward play with unique DeFi and NFT integration.
In Ethereum-based DeFi, Uniswap remains the largest decentralized exchange, showing volume growth and protocol upgrades that drove a recent +20% rebound, making it a solid mid-term DeFi play. Chainlink, as the dominant decentralized oracle, is critical infrastructure for Ethereum DeFi and NFTs. Its on-chain LINK Reserve mechanism supports token scarcity and steady price appreciation, favored for strategic holdings.
The strong bullish momentum of Ethereum might lead to a short-term pullback before further gains. Traders are monitoring whether ETH can sustain itself above crucial support ranges. The opinions among traders are divided regarding whether ETH will make an immediate jump higher or stagnate before another leg up. The MACD has verified a crossover of the 186 and 196 levels, serving as a buy signal.
Among Layer-2 cryptos, Mantle is another emerging project combining DeFi with traditional banking use cases and should be monitored for potential gains. ETH technical indicators such as a 20-day EMA above $3,500 and bullish MACD patterns align with projected ETH price targets of $5,000 to $8,000 in coming months, implying positive momentum for Layer-2 ecosystems built atop Ethereum.
In summary, for short-term returns during Ethereum’s bullish phase in 2025, investors should focus on leading Layer-2 scaling solutions—primarily Arbitrum, Polygon zkEVM, StarkNet, and zkSync—alongside strategic DeFi protocols like Uniswap and Chainlink. For higher risk/reward, Layer Brett ($LBRETT) offers speculative upside with staking incentives. Monitoring Ethereum technicals and DeFi adoption will aid timing for entry and exit.
- Michael van de Poppe, a crypto analyst, suggests that Ethereum could break its all-time highs due to strong buyer-dominant conditions, as indicated by the RSI on the daily chart.
- Arbitrum, a leading Layer-2 solution, boasts high transaction throughput and has integrated over 600 dApps, making it a promising investment opportunity in Ethereum-based DeFi.
- Apart from Arbitrum, Uniswap, the largest decentralized exchange in Ethereum-based DeFi, and Chainlink, the dominant decentralized oracle, also present strong investment cases due to growth potential and ecosystem importance.
