Ethereum Price Forecast: ETH slides to $2,100 amid community debate over Vitalik Buterin's SoV pitch

Ethereum trades at $2,110 today

• Following Vitalik Buterin's call to replace the fee-burning narrative with a store-of-value thesis, Ethereum trades lower.
• With a purchase of 9,587 ETH, Bitmine increased its holdings to 6.07 million ETH, equivalent to 4.97% of Ethereum's total supply.
• A break below support around $2,100 could send ETH down to $1,970.

A 4.6% decline in Ethereum (ETH) on Monday comes amid debate within the crypto community over co-founder Vitalik Buterin's view of the leading altcoin's long-term value. He argues that its store-of-value (SoV) characteristics, rather than transaction fee burning, should underpin that value.

Writing in an X post on Sunday, Buterin said decentralisation, security and censorship resistance should take precedence over optimising ETH to burn more fees, particularly as AI development gathers pace.

Ethereum's fee-burning investment case faces scrutiny from Buterin

Since the introduction of EIP-1559 in August 2021, fee burning has played a significant role in the investment case for ETH. Under the system introduced by the upgrade, the network burns the base fee charged on transactions, taking those tokens out of circulation permanently.

When network activity is elevated, more ETH can be burned than is newly issued, giving the asset a partially deflationary character.

The economic argument for valuing ETH chiefly on fee burning "never was as strong as it seemed." That was Buterin's assessment, as he pointed out that crypto-native activity had generated much of Ethereum's historical fee revenue. A fall in ETH's price could therefore also erode the economic value underpinning those fees.

Seeking the highest possible fee revenue could also entail more expensive transactions, increased protocol spending and more interventionist governance, he warned. Such changes could weaken Ethereum's decentralisation.

With AI advancing rapidly, Buterin instead proposed grounding ETH's store-of-value case in Ethereum's fundamental strengths. He groups these under CROPS: censorship and capture resistance, open source, privacy and security.

Highlighting continuing work on post-quantum security, privacy, multisig wallets and censorship-resistant transactions, he wrote: "The first and most important SoV-ish metric? To survive,"

Retaining EIP-1559 and its burn mechanism remains important, Buterin clarified. However, he said investors should not be disheartened if the volume of fees burned stays too low to offset newly issued ETH.

Support for Buterin's stance came from several leading industry figures. Among them was Solana co-founder Anatoly Yakovenko, who argued that fees should not be Ethereum's principal product.

For Moonrock Capital founder Simon Dedic, ETH's store-of-value case could also be Ethereum's strongest bullish argument. He contended that this could offer institutional capital a more straightforward investment narrative.

Critics, however, maintain that reducing the emphasis on fee burning could allow Ethereum to expand as a platform while generating little additional value for ETH itself.

Bitmine lifts ETH holdings towards 5% of total supply

Further ETH purchases by Bitmine Immersion Technologies have brought its treasury nearer to its target of owning 5% of the leading altcoin's supply.

Through an update on Monday, the company reported buying a further 9,587 ETH in the past week. Its holdings now total 6.07 million ETH, or approximately 4.97% of Ethereum's 122.2 million ETH circulating supply.

A further disclosure from the company confirmed that 5.227 million ETH remained staked through its Made in America Validator Network (MAVAN).

Responding to Buterin's store-of-value argument, BitMine Chairman Thomas Lee described ETH as pristine, trusted collateral rather than a cash-flow token such as HYPE or LIT.

Ethereum technical outlook: ETH faces downside risk towards $1,970

Coinglass data showed $507.9 million in Ethereum liquidations during the past 24 hours. Long positions accounted for the bulk of that total, at $457.8 million.

Trading below the 20-day, 50-day and 100-day Exponential Moving Averages (EMAs), which are grouped between approximately $2,291 and $2,371, ETH retains a bearish short-term bias on the daily chart. Adding to that downside tilt, the 14-day Relative Strength Index (RSI) is close to 33, while the Stochastic Oscillator (Stoch) stands around 13. Both indicate persistent oversold conditions that could temper the selling, although a convincing rebound has yet to materialise.

The horizontal level around $2,101 provides the nearest downside support. Below it, further support lies at $1,971, followed by $1,827.

An advance would first encounter resistance at $2,204, then $2,250 and the 20-day EMA. Further up, the 100-day EMA combines with the $2,355 and $2,371 levels to create a concentrated supply zone. A recovery would be necessary to relieve the prevailing bearish pressure.

(The technical analysis of this story was written with the help of an AI tool. Know more.)