Ethereum (ETH) saw a slight decline on Monday, trading around $3,330, reflecting broader market weakness following U.S. President Donald Trump’s failure to address cryptocurrency in his inauguration speech. Despite this, Ethereum may have a promising year ahead, as the Ethereum Foundation has responded to mounting criticisms by committing 50,000 ETH to the decentralized finance (DeFi) sector.
Ethereum Foundation’s Response: 50,000 ETH Dedicated to DeFi
In a move aimed at addressing criticisms of its past sales, the Ethereum Foundation announced on X (formerly Twitter) that it had allocated 50,000 ETH from its treasury to participate in the DeFi ecosystem. The initial step includes a test transaction on the Aave lending protocol, marking the Foundation’s first direct involvement in DeFi.
This decision follows public scrutiny earlier in the day when the Foundation was criticized for selling an additional 100 ETH, contributing to concerns that its sales activity was undermining the long-term value of Ethereum. Many in the crypto community pointed to the Foundation’s $13.3 million worth of ETH sold over the past year as evidence that the Ethereum Foundation was not using the blockchain to its full potential.
In response to the criticisms, angel investor Eric Conner suggested that the Foundation should stake a portion of its ETH holdings to balance out the impact of its selling activity and to generate income.
However, Ethereum co-founder Vitalik Buterin defended the Foundation’s strategy, citing concerns over regulatory risks and the potential need to take a position in case of a contentious hard fork. While he acknowledged that regulatory risks had decreased, Buterin emphasized that the Foundation’s stance on staking had not changed due to the potential complications around hard forks.
Tim Beiko, Ethereum’s protocol lead, also weighed in, explaining that staking the Foundation’s remaining 269,000 ETH would generate an annual yield of only 8,000 ETH, which would cover less than 20% of the Foundation’s projected $134.7 million in expenses for 2025. Beiko argued that leveraging the ETH treasury to cover operational costs would be “reckless.”
With the 50,000 ETH now allocated to DeFi, the Foundation hopes to generate returns by exploring a range of yield-generation strategies within the decentralized finance space.
Leadership Changes and Strategic Shifts at Ethereum Foundation
In addition to its financial maneuvers, the Ethereum Foundation has been undergoing significant leadership changes. Buterin recently revealed that the Foundation is restructuring its leadership team, bringing in new talent and improving its technical expertise. These adjustments are aimed at strengthening the Foundation’s ability to drive Ethereum’s development and address criticisms regarding its management.
Ethereum Price Outlook: Resistance Near $3,776 Could Lead to a 20% Rally
Ethereum’s price action continues to show consolidation, with ETH bouncing off a key support level of $3,216 and remaining within the $3,200–$3,500 range. The cryptocurrency saw significant liquidations recently, with nearly $180 million in futures positions cleared in the past 24 hours, according to Coinglass data.
ETH faces immediate resistance near the 100-day Simple Moving Average (SMA) and a descending trendline that has been in place since December 16. If Ethereum manages to break through these resistance points, it could test the $3,776 level and potentially make a strong push toward its ten-month high near $4,100. This would represent a potential rally of around 20% from current levels.
In other notable developments, Ethereum exchange-traded funds (ETFs) saw net inflows of $246 million last week, indicating strong investor interest despite the ongoing market volatility.
As the Ethereum Foundation strengthens its involvement in DeFi and addresses operational concerns, ETH holders may see positive momentum if the coin breaks through its current resistance levels.
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