Can ETH compete with Solana?

Despite the institutional buying and price recovery, ETH remains down 15% over the past week and is still nearly 45% below its all-time high of $4,890, recorded in November 2021.

So, what’s really happening in Ethereum’s ecosystem, and how could it impact Ethereum’s price prediction in the days ahead? Let’s dive deeper.

Ethereum ecosystem updates

Ethereum has been making critical changes to improve scalability and transaction efficiency.

Gas limit increase and scalability improvements

On Feb. 3, validators approved an increase in Ethereum’s gas limit for the first time since 2021, marking the first adjustment in the post-Merge era. 

The increase raised the gas limit from 30 million to over 31 million units, with a maximum capacity of 36 million expected soon. 

Unlike previous changes that required a hard fork, the adjustment took effect automatically after more than half of the validators signaled their support.

Gas represents the computational power needed to execute transactions and smart contracts on Ethereum. Every action on the network incurs a gas cost, and the gas limit determines the total computational work that can be processed in a single block. 

When transaction volume exceeds this limit, users either wait for inclusion in a later block or pay higher fees to have their transactions prioritized. 

Raising the gas limit increases the number of transactions and operations that can fit within a block, improving overall throughput and easing congestion. 

The change also allows more complex decentralized applications to function smoothly, benefiting the growing ecosystem of financial applications, NFT platforms, and on-chain services.

However, while raising the gas limit helps improve transaction capacity, it does not address Ethereum’s core limitations in cost and speed. 

For instance, Ethereum handles 1 to 1.5 million daily transactions, while Solana processes between 60 and 65 million. The difference is substantial, with Solana not only processing exponentially more transactions but also doing so at a fraction of the cost, making long-term scalability a persistent challenge.

Ethereum’s market position and competitive challenges

To address these concerns, Ethereum’s upcoming Pectra upgrade, set to go live in early 2025, is expected to enhance network scalability further, particularly for layer-2 solutions. A key part of this upgrade involves increasing the blob target from three to six. 

Blobs are large data packets used in layer-2 scaling solutions, allowing them to store transaction data temporarily rather than writing it directly onto Ethereum’s main chain. Expanding blob capacity effectively increases the throughput of layer-2 networks, making them faster and cheaper.

Layer-2 solutions like Arbitrum (ARB), Optimism (OP), and zkSync (ZK) already play a crucial role in reducing congestion and gas fees for Ethereum users. 

Arbitrum, the largest layer-2 network in terms of total value locked, has seen consistent growth due to its ability to batch multiple Ethereum transactions into a single compressed proof, significantly cutting costs. 

Optimism follows a similar approach but integrates an incentive model that distributes OP tokens to projects building on its network. 

zkSync, which leverages zero-knowledge rollups, provides an even more advanced scaling solution, offering near-instant transactions with lower fees.

While these layer-2 solutions help alleviate Ethereum’s congestion issues, they highlight a fundamental contrast between Ethereum and its competition. 

Unlike Ethereum, which relies on additional layers to scale, other blockchain ecosystems have built-in scalability. Solana, Avalanche (AVAX), and even emerging players like Sei (SEI) are capable of handling large transaction volumes without requiring external scaling solutions.

Beyond technical upgrades, Ethereum’s market position has also been facing pressure. The ETH/BTC ratio has dropped to 0.027 as of Feb. 4, its lowest level since March 2021 and nearly 50% lower than a year ago. 

As Bitcoin continues to gain dominance in both liquidity and investor interest, Ethereum’s relative valuation remains under scrutiny.

Can Ethereum hold its ground?

Ethereum’s recent price drop to $2,150 on Feb. 3 was not just a reaction to broader economic uncertainty but also served as a market reset, clearing out excessive leverage that had built up in Ethereum’s open interest.

“There was a lot of garbage low-quality leverage long open on Ethereum which got closed when price touched the 2100 area,” noted one analyst, highlighting a $4 billion reduction in open interest that ultimately helped stabilize the market.

With those positions flushed out, Ethereum’s price recovery to $2,700 was driven by spot demand rather than excessive leverage, signaling a healthier foundation for future price movement, he added.

From a technical perspective, Ethereum briefly dipped below its 200-week moving average, a significant level that has often acted as a major support zone.

“ETH may have offered the sweetest gift of 2025, dipping below the 200 WMA in the early morning and testing the 0.618 Fib,” another trader pointed out, referring to key retracement levels that have marked past cycle bottoms.

While price has already reclaimed the 200 WMA, previous instances where Ethereum tested this level in August and September 2024 led to strong recoveries.

However, the broader macro landscape still presents risks. The recent market dip was triggered by escalating U.S. tariffs, a policy shift that briefly shook global financial markets.

While diplomatic resolutions have provided temporary relief, uncertainties remain, particularly around potential retaliatory measures or further economic restrictions. If global liquidity tightens or risk sentiment weakens, Ethereum’s ability to sustain a recovery could face challenges.

Another factor to watch is Ethereum’s ability to maintain market dominance relative to Bitcoin (BTC). The ETH/BTC ratio has been on a downtrend, reflecting a shift in investor preference toward Bitcoin, which has seen stronger institutional flows.

Ethereum’s upcoming Pectra upgrade and the recent gas limit increase could support its ecosystem growth, but these improvements need to translate into tangible benefits for users and developers to sustain long-term demand.

Ethereum price prediction: will the downtrend reverse?

The latest market reset, which cleared out billions in leveraged positions, has left Ethereum in a healthier position, but what happens next depends on a mix of factors—scalability upgrades, adoption, competition, and economic conditions.

Ethereum price prediction 2025

Ethereum’s price action in 2025 is expected to be shaped by its ability to scale efficiently while maintaining strong demand within its ecosystem.

DigitalCoinPrice forecasts an average of $5,510, with a potential peak of $6,037, while Changelly takes a more bullish stance, predicting an average of $6,124 and a maximum of $7,194.

Joe, co-founder of DeAgentAI, told crypto.news that the recent price action fits a broader historical pattern. “Short-term bearish signals—like the one flagged on Feb. 3—often require nuanced interpretation.”

He pointed to historical setups from 2023 and 2024 that triggered sharp reversals, suggesting traders should watch for Ethereum’s reaction to key support levels.

Ethereum price prediction 2027

If Ethereum continues leading the smart contract space and scaling solutions mature, ETH could see a rise in 2027.

DigitalCoinPrice projects an average of $9,580 with a peak at $10,098, while Changelly paints an even stronger outlook, predicting an average of $12,316 and a maximum of $14,527.

At the same time, DeFi growth, NFT innovation, and Ethereum’s role in real-world asset tokenization could provide fresh demand for ETH.

However, if risk assets face tightening conditions, ETH’s price could face headwinds despite fundamental improvements.

Ethereum price prediction 2030

Meanwhile, long-term forecasts see Ethereum reaching levels that once seemed distant.

DigitalCoinPrice estimates an average price of $14,829 in 2030, with a high of $15,108, while Changelly provides a much more aggressive projection, predicting an average of $40,055 and a potential peak of $47,066.

That being said, long-term predictions always come with risks. Ethereum faces competition from Solana, Avalanche, and emerging blockchain networks, all aiming to offer lower fees and higher speeds.

While ETH prediction models remain optimistic, it’s essential to combine technical forecasts with real-world adoption trends before making any long-term commitments. Hence, trade wisely and never invest more than you can afford to lose.