Standard Chartered analysts led by Geoffrey Kendrick lowered the bank’s expectations for Ethereum’s price in 2025.

The bank adjusted its latest prediction, reducing Ethereum’s 2025 price target from $10,000 to $4,000.

Ethereum needs to overcome a key descending trendline resistance to break out of its range-bound movement.

Ethereum (ETH) remained just below $2,000 in the Asian session on Tuesday as Standard Chartered’s Global Head of Digital Assets Research, Geoffrey Kendrick, updated the bank’s 2025 price forecast for ETH. The UK-based financial institution now expects Ethereum to reach $4,000, a significant revision from its earlier projection of $10,000.

Standard Chartered analysts predicted that Ethereum may not get to $10,000 in 2025 due to the growing impact of Layer-2 solutions on its value.

In a market note to investors, Standard Chartered’s Geoffrey Kendrick shared the bank’s updated expectations on the price of Ethereum. The revision of this price run comes after Ethereum hit multi-month lows, with its price dropping below the $2,000 threshold.

Standard Chartered now expects Ethereum to rise to $4,000 in 2025 instead of its initial prediction of $10,000.

Kendrick also anticipates Ethereum’s prolonged market cap decline until the end of 2027. Although Ethereum could recover and begin performing well again, the analysts noted that its market cap will ultimately continue to lose out in the long run.

The major reason for this decline in the forecast is the effect of Ethereum’s Layer-2 networks on its efficiency and price. Kendrick noted that Ethereum has “commoditized itself” as it continues to lose out to Layer-2 solutions on its blockchain. The continual diversion of fees away from Layer-1 onto L2s has caused its price to decline.

Coinbase’s Base blockchain became a major reference source for Kendrick when discussing L2s. According to Kendrick, Base alone has siphoned approximately $50 billion from Ethereum’s market capitalization. 

He explained that when users transact on these Layer-2 solutions rather than the main Ethereum network, transaction fees are redirected to external entities like Coinbase instead of the Ethereum validators. As a result, Ethereum collects fewer fees.

The analyst also suggested that this decline in fee negatively affects ETH’s price, as it reduces the Ethereum blockchain’s overall economic activity. As transaction fee incomes drop, ETH may need to alter its issuance model to cover operational costs, potentially exerting downward pressure on the asset’s value, the bank stated.

Kendrick also proposed that the Ethereum could counter this trend by implementing measures such as imposing fees on Layer-2 networks. However, he expressed skepticism about the likelihood of such a shift in strategy.

“The solution would be to tax Layer 2 super-profits in the same way governments sometimes charge super taxes for foreign-owned mining companies that extract excess profits. Unless that happens, ETH-BTC will keep going down,” Kendrick wrote.

Ethereum saw $30.21 million in futures liquidations in the past 24 hours, per Coinglass data. The total amount of long and short liquidations accounted for $15.77 million and $14.25 million, respectively.

The top altcoin extended its consolidation into the second week as it failed to recover the $2,000 psychological level and secure a move above a key descending trendline resistance.

ETH/USDT daily chart

If the consolidation persists, ETH could suffer a breakdown below $1,750 to test the critical support level at $1,500. On the upside, ETH needs to overcome the descending trendline resistance and hold it as a support to flip the bearish trend.

The Relative Strength Index (RSI) and Stochastic Oscillators (Stoch) are below their neutral levels, indicating dominant bearish momentum.

A daily candlestick close above $2,200 will invalidate the bearish thesis and potentially send ETH toward $2,800.