Ethereum’s Bullish Momentum Grows as Arbitrum Faces Treasury Pushback

Ethereum’s Price Action and Market Sentiment

Ethereum has faced its fair share of market skepticism. However, popular analyst Doctor Profit recently pointed out how Ethereum’s current situation mirrors XRP’s past struggles. Just months ago, XRP was trading at around $0.40–$0.50, and many investors dismissed it. Despite the negativity, Doctor Profit encouraged his followers to invest, and XRP has since gained significant traction. Similarly, Ethereum is now receiving criticism, but experts predict a strong comeback if the resistance at $2,850 is broken.

Ethereum’s price is currently within a descending channel, finding support near $2,700. A breakout above $2,850 could see the price reaching new targets, such as $3,200 and $3,600. Market sentiment is divided, but history suggests that assets facing criticism often experience strong recoveries. Investors are closely monitoring Ethereum’s price action to gauge if a bullish reversal is in the cards.

Arbitrum DAO’s Treasury Allocation Sparks Debate

The decentralized autonomous organization (DAO) of Arbitrum is currently facing internal controversy over its treasury allocation decisions. The Growth Management Committee (GMC) recently nominated three decentralized finance (DeFi) projects to receive funding, but none of these projects operate on Arbitrum’s network. This decision has raised concerns within the community, leading to heated discussions about the direction of the DAO.

Non-Native Projects Receive Funding

The GMC has proposed a 7,500 ETH allocation to three DeFi projects, including a 5,000 ETH investment into the liquid staking protocol Lido. This investment will generate 5,000 wstETH (wrapped staked ETH) tokens, which the GMC plans to use in Aave V3 on Arbitrum. The goal is to boost borrowing activity and leverage incentive programs related to Lido, Aave, Renzo, and Kelp. The remaining 2,500 ETH is earmarked for Fluid’s lending protocol on Arbitrum.

Community Concerns Over Exclusion of Arbitrum-Native Projects

One of the key points of contention is the exclusion of Arbitrum-native projects from the funding allocation. The GMC reviewed proposals from 45 different protocols, including Arbitrum-native platforms like Dolomite and GMX. However, none of these local protocols received funding, leading to criticism from community members.

• The GMC’s investment into Lido is expected to generate a 4.54% yield from wstETH deposits.
• The Fluid protocol investment is anticipated to yield 1–2% in native ETH, enhancing liquidity within Arbitrum’s ecosystem.

Many delegates have voiced concerns, including JoJo, who emphasized the importance of supporting projects that directly contribute to the Arbitrum ecosystem. There are calls for a more diversified allocation strategy that includes Arbitrum-native projects, which would help strengthen the network in the long run.

Conclusion: Divided Sentiment, but Optimism for Ethereum’s Future

The controversy surrounding Arbitrum DAO’s treasury allocation and Ethereum’s current price consolidation highlight a divided market sentiment. While some analysts remain skeptical, there is growing optimism about Ethereum’s potential rebound, especially if resistance at $2,850 is broken. Ethereum’s price action, combined with its potential for recovery, makes it a focal point for investors closely monitoring the crypto market.