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Citigroup's New Prediction for Ethereum: A Cautious Outlook for Investors

Ethereum (ETH) has recently experienced significant volatility, reaching an all-time high of over $4,900 before dropping to around $4,200 amid a general market correction.

Currently hovering around $4,515, ETH's price is under scrutiny as Citigroup forecasts it could decline to $4,300 by the end of this year.

The banking giant emphasized that while network activity is crucial to Ethereum's value, most of its recent gains have been driven by Layer-2 networks rather than its base layer.

With only approximately 30% of network activity migrating to Ethereum's main chain, analysts caution that the current price may be overstated.

Despite positive expectations surrounding Ethereum's role in tokenization and stablecoins, Citigroup warns that the valuation seems inflated.

Looking ahead to 2025, Citigroup presents a base case scenario of $4,300, a bullish potential of $6,400, and a bearish outlook that could see prices dropping as low as $2,200.

This forecast has sparked concern among ETH investors, who were previously optimistic about the potential for significant price increases.

The bank's insights underline the importance of understanding the dynamics between Layer-1 and Layer-2 solutions, which may ultimately dictate Ethereum's future trajectory.

Investors are advised to remain cautious, as the market remains unpredictable and influenced by diverse factors.

As Ethereum continues to evolve, monitoring these developments will be crucial for stakeholders within the crypto space.