Ethereum’s Bullish Signs Grow While Arbitrum Faces Pushback Over Treasury Allocations

• Ethereum mirrors XRP’s past skepticism, but analysts foresee a strong rebound if resistance at $2,850 is broken.
• Arbitrum DAO’s treasury decision sparks controversy as non-native projects receive funding, raising concerns among community members.
• Ethereum’s price consolidates near $2,700, with a potential breakout targeting $3,200 and $3,600 amid divided market sentiment.

Popular analyst Doctor Profit recently highlighted Ethereum’s growing potential, drawing parallels to XRP’s past market skepticism. Just months ago, many investors disregarded XRP at $0.40–$0.50. Despite the negativity, Doctor Profit encouraged his followers to invest. Now, XRP has gained traction. Similarly, Ethereum is currently facing criticism, yet experts predict a strong comeback.

Arbitrum’s Treasury Allocation Sparks Debate

The decentralized autonomous organization (DAO) of Arbitrum is having internal conflicts. Three decentralized finance (DeFi) projects were nominated to receive 7,500 ETH by its three-member Growth Management Committee (GMC). However, none of these projects operate on Arbitrum. Consequently, some delegates have voiced their opposition.

The GMC plans to invest 5,000 ETH into the liquid staking protocol Lido. This investment would generate 5,000 wstETH (wrapped staked ETH) tokens. Additionally, the GMC suggests using these wstETH tokens in Aave V3 on Arbitrum. This strategy aims 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.

Discontent Over Exclusion of Arbitrum-Native Projects

The GMC reviewed proposals from 45 different protocols, including Arbitrum-native platforms like Dolomite and GMX. The committee anticipates a 4.54% yield from wstETH deposits. Similarly, the Fluid protocol investment is expected to yield 1–2% in native ETH, enhancing liquidity within Arbitrum’s ecosystem. However, community members remain skeptical.

Notably, all requests for comments from GMC members went unanswered. The GMC initially sought to increase risk to drive higher yields. However, as Entropy Advisors suggested, the committee eventually adopted a conservative approach. This shift aims to strengthen the DAO’s treasury before managing higher-risk positions.

Despite this rationale, some Arbitrum DAO members question why local protocols were overlooked. Delegate JoJo expressed concerns, emphasizing the importance of supporting projects that directly contribute to Arbitrum. Additionally, he suggested a more diversified allocation strategy.

Ethereum’s Price Action and Market Sentiment

Ethereum’s price is trading within a descending channel. Recently, it found support near $2,700, consolidating within this range. A potential breakout is forming, with resistance near $2,850. If this level is breached, the next targets are $3,200 and $3,600.

Market sentiment remains divided. However, history suggests that the most criticized assets often experience the strongest recoveries. Investors are closely watching Ethereum’s price action for confirmation of a bullish reversal.