Ethereum (ETH) has recently attracted attention with its performance around $3400. Although it shows a pullback in the short term, a deeper analysis of the market structure reveals some positive signals.

Currently, the trading characteristics of ETH show three obvious trends: the chips are gradually stabilizing during the sideways period, the trading volume is showing a gradual contraction, and the volatility has dropped to a recent low. The combination of these three factors is like a bow that is ready to launch, indicating a potential major upward trend that may be forthcoming.

Looking back at the bull market from 2020 to 2021, we can see that ETH usually experiences one or two seemingly severe declines before breaking through key price levels. This apparent pullback actually serves to shake off floating positions, creating conditions for a real breakthrough. Just like an athlete needs to bend their knees before jumping, this rhythmic adjustment often serves as a prelude to a major market movement.

What is even more worth following is that some potential trends in the Ethereum ecosystem are beginning to show strength. Layer 2 solutions are maturing, with the number of users and the scale of funds on sidechains like Arbitrum and Optimism continuously growing. At the same time, the Gas demand on the ETH main chain is quietly rebounding, indicating that on-chain activities have not truly cooled down. The trading volume in the decentralized finance (DeFi) sector is also steadily warming up, with new protocols and applications being deployed. These phenomena are not isolated events, but rather a manifestation of the entire ecosystem's gears accelerating, accumulating energy for the next cycle.

Therefore, investors should not be troubled by the pullback around $3400. This is not a signal of recession, but rather a phase of energy buildup after compression. Just like the calm period before a volcanic eruption, the more tranquil the surface, the stronger the energy accumulation may be inside. Once this potential energy is fully accumulated, the force of the breakout may exceed market expectations.

Overall, the current performance of the Ethereum market may indicate the beginning of a new upward cycle. Investors should closely follow market trends while cautiously assessing risks.