Ethereum faced brutal selling pressure on the first day of December as the cryptocurrency plunged below the critical $3,000 threshold and found temporary support around $2,800.
According to Ted Pillows on X, ETH lost the psychological $3,000 level and dumped directly into the support zone, marking a sharp reversal from recent price action.
The second-largest cryptocurrency traded in the $2,800-$2,850 range after dropping roughly 6% on the day.
The broader market experienced similar pain, with Ted Pillows noting on X that $120.74 billion vanished from total crypto market capitalization in a single session. December's opening transformed into what traders dubbed Dumpcember, catching many investors off guard.
Exchange Supply Signals Accumulation Phase
While prices declined, a contrasting trend emerged beneath the surface. CryptoGoos highlighted on X that Ethereum supply on exchanges is dropping rapidly, suggesting investors are moving holdings to private wallets for long-term storage rather than selling.
This pattern typically indicates accumulation by sophisticated investors who anticipate future price appreciation.
When exchange reserves decline during price dips, it reduces available selling pressure and creates conditions for potential supply squeezes once demand returns.
The behavioral shift represents a stark contrast to panic selling scenarios where exchange balances surge as holders rush to liquidate positions.
Current data points to conviction among large holders despite short-term price weakness.
Layer 2 Growth Challenges Value Capture
Ethereum's scaling solutions demonstrated impressive expansion this cycle. TheDeFinvestor reported on X that Layer 2 networks increased daily transactions by over 11 times during the past three years, showcasing the ecosystem's ability to handle growing demand efficiently.
However, this success raises a critical question about value accrual to the base layer. As more activity migrates to L2 solutions offering cheaper transactions, the mechanism by which ETH captures this value remains under scrutiny by investors and analysts.
Evan Van Ness pushed back against Layer 2 migration concerns on X, emphasizing that Ethereum transaction fees have remained dirt cheap throughout 2025. He attributed this to client optimizations and cheaper hard drives, predicting the gas limit will continue expanding to maintain low fees. His message urged developers to Return To Mainnet, suggesting L1 remains viable for many use cases.
Vitalik Buterin reinforced this perspective on X with a simple but pointed statement: You can just build on L1. The Ethereum co-founder's comment directly challenged narratives that developers must migrate to Layer 2 networks to achieve reasonable costs.
The competitive landscape for value capture extends beyond internal Layer 2 dynamics. One X commentator argued that Ethereum's total addressable market encompasses all global money, amplified by 10x efficiency gains.
The analysis claimed ETH could absorb monetary premium from gold, store-of-value demand from real estate, and investment flows from traditional stock markets in ways Bitcoin cannot replicate due to its limited programmability.
Technical Outlook Hinges On Support Test
The Fusaka upgrade scheduled for December 3 will activate on mainnet as Ethereum's second major hard fork of 2025.
This network improvement aims to increase gas capacity from approximately 45 million to 150 million per block, significantly boosting data availability for rollups.
The upgrade introduces PeerDAS, a new data availability system designed to make rollup operations more efficient when posting data to Ethereum's base layer. These structural improvements target node efficiency and could potentially lower hardware requirements over time.
From a price perspective, Ted Pillows outlined on X that if the $2,800 support zone holds, Ethereum could experience a bounce back toward higher levels.
Conversely, failure to maintain this support would likely push ETH below $2,500, opening the door to deeper corrections.
Market analysts frame the next three to six months with scenarios ranging from reclaiming $3,000 and squeezing toward $3,500-$4,200 if the upgrade succeeds and macro conditions improve, to choppy trading between $2,400 and $3,500 if momentum remains mixed.
The intersection of technical support levels, network upgrades, and shifting on-chain metrics creates a complex environment for traders.
While price action turned decisively bearish to start December, underlying fundamentals present a different picture than the charts alone suggest.