Citibank updates Ethereum forecast: under the base scenario, it will fall to $4300 by the end of the year.

Citi Group has updated its forecast, expecting Ethereum to fall to $4300 by the end of this year under the baseline scenario, lower than the current $4515. However, the bank also forecasts Ethereum to rise to $6400 in a bull market scenario, and fall to $2200 in a bear market scenario. Citi analysts have stated that network activity remains a key driver of Ethereum's value, but most recent growth has occurred on layer-2 networks, and the transmission effect of this value to the Ethereum main chain is not yet clear. In blockchain terms, Layer 1 refers to the underlying infrastructure (main chain), while Layer 2 refers to a series of off-chain systems or independent blockchains built on top of Layer 1. Citi assumes that only 30% of layer-2 activity contributes to Ethereum's value, leading to the current price being higher than its activity-based model valuation, likely due to strong inflows of funds and enthusiasm surrounding tokenization and stablecoins. Citi points out that although Ethereum ETF inflows are smaller than Bitcoin's, their price impact per unit of capital is greater. However, considering Ethereum's smaller market cap and lower visibility among new investors, Citi expects Ethereum ETF inflows to remain limited. Citi analysts believe that macro-level support is limited. Furthermore, as the S&P 500 index approaches the bank's target of 6,600 points, analysts expect that risk assets will not see significant increases.