Ethereum’s Worst Crisis? Nic Carter Says Ethereum Layer-2s Are ‘Extracting’ Its Value!

Ethereum (ETH) is again in the spotlight, and this time for all the wrong reasons. The recent market crash seems to have affected Ethereum the most, as it plunged into the $1800 range. Some industry experts have also declared it as the beginning of the end. Nic Carter, partner at Castle Island Ventures, has linked this bearish sentiment to the rise of Ethereum layer-2 networks, which are “siphoning value” from the primary layer. 

Investor Interest Falling, ETH/BTC Ratio Worst in Years!

In a recent post on the social media website X, Carter highlighted that the excessive minting of tokens without community outrage has made the situation far worse for Ethereum. The blockchain currently grapples with key issues like declining transaction activities and new users’ growth on the primary network. This has led to serious volatility issues for the ETH token.

To add to that, Quinn Thompson, founder of Lekker Capital, agreed with Carter’s opinion, claiming that Ethereum’s market capitalization of $225 billion is being undermined by its falling investor interest. He noted that the ETH/BTC ratio is at its lowest in around 5 years, indicating a troublesome period for Ethereum. Currently trading around the $1,870 mark, ETH has seen a 5.4% drop over the past week alone.

Layer-2 Solutions Leeching Gains Off of Layer-1?

The rise of Ethereum Layer-2 solutions was initially predicted to be a way to scale Ethereum easily by reducing transaction costs and increasing throughput. However, critics now argue that these Ethereum Layer-2 solutions have become ‘extractive’, capturing the majority of user transactions and fees without compensating the Ethereum network fairly. Reports also indicated that Ethereum’s fee revenue has plummeted by 99% in recent months due to this situation.

Despite these challenges, some investors have continued to retain their bullish sentiments about Ethereum’s future. This comes in as major financial institutions like Standard Chartered revise their predictions for ETH, cutting the number by 60%. As the debate regarding Ethereum’s future continues, its bittersweet relationship with its Layer-2 solutions will be critical in determining its fate. 

ETH Price Analysis: Ethereum Price Crash Shocks Market

ETH started the day on the verge of falling off the $2,000 mark. It consolidated around $1,999, with strong resistance at $2,018. ETH made one final attempt to break the resistance, but failed to do so. ETH looked to find support again, as it consolidated around the support. However, the death cross at 4:30 UTC proved to be disastrous for ETH. Right after, ETH abandoned the support and plunged instantaneously, going all the way down to $1,900, a whopping 5% drop within half an hour. A panic sell-off ensued as the RSI indicated heavily overbought levels. A golden cross did appear, but it could only slow down the decline, as ETH fluctuated and settled around the $1,905 support. 

Chart1: analyzed by raodevansh18, published on TradingView, March 29, 2025a

However, any upward movement was quickly reversed and ETH seemed to form a bearish triangle. By 11:25, ETH again breached the $1905 support and ventured into the 1800s. ETH eventually found support at $1,877, but failed to hold on again, reaching its 24-hour low of $1,861. ETH since then seemed to be on a gradual uptrend as buying pressure picked up steam, but could only muster to touch the $1,915 resistance at 2:10 UTC on March 29. Ever since, ETH has been on a slow downtrend, finding support at $1,877 again. 

ETH Price Prediction: Can ETH Really Recover?

The entire crypto market was down on Friday, but Ethereum faced the brunt of it. It has been facing a mix of issues for a while now. While Ethereum may temporarily recover from this crash, the growth of its Layer-1 network is still uncertain. For now, ETH looks poised to abandon the current support level again. If it does not, another slow uptrend may be on the cards.