$ETH Oh! Really, just stop paying attention.

Do you know why Brother Chuan isn't doing ETH? This is the reason.

These days, are the levels in your live broadcast room accurate enough, brothers!
Let it accelerate ⏩ just accelerate, let it go up just go up.
If you follow Brother Chuan's approach, you'll be eating big gains. As for me, I’m here eating instant noodles 🍜

Unfortunately, Brother Chuan almost got liquidated, turning $80U into four times that!

Alright, brothers, no more nagging. Read the main text below ⬇️ carefully, learn well!

After falling by half from the peak, the crypto community is all saying “ETH is dead.”

But there's a deeper issue: L2 usage has clearly declined, with new users and new applications slowing down. This is what V God is truly anxious about.

Recently, besides Huazi Ge, everyone in the group is panicking.

"ETH is around 2300, should I clear my position?"
"I've already lost 50%, if I don’t sell now, it’ll be too late."
"I heard that overall activity on L2 is decreasing, what does that mean?"

Only one veteran friend didn’t speak.

Half an hour later, he sent a message: "Look at L2 data, mainnet Gas fees, and the performance of competing public chains. The signals aren’t very good, preparing to reduce ETH holdings."

Someone asked: "ETH has fallen by half from its peak, isn’t this the bottoming opportunity?"

"Not about the price, but about the ecosystem. ETH’s real crisis isn’t how much the price has fallen, but that the marginal growth of the L2 ecosystem is stagnating.

If L2 activity growth slows + competing chains’ activity rises, it indicates user growth is flowing elsewhere. At this point, trying to catch the bottom is very risky."

This isn’t the first time he’s made such a judgment.

During the Gas fee crisis in 2021, ETH dropped from $4800 to $1700,
he didn’t panic but waited for L2 solutions to land. As a result, ETH rebounded +120% after 6 months.

During the 2023 MEV crisis, ETH fell from $2100 to $1500 (-28%), he also waited for Flashbots to launch MEV-Boost. As a result, ETH rebounded +45% after 3 months.
The method he used is the one I’m sharing today: the Three Signal Indicators for L2 Crisis.

Three Core Insights
1. Not all L2s are declining, but the marginal growth of L2s is decelerating. The slowdown in new users and new applications is a warning signal when the activity of competing chains rises simultaneously.

This is not a small issue. L2s should be ETH’s “scaling solution,” but now users aren’t using them. What does that mean? It indicates L2s aren’t providing enough value to users.

The key issue isn’t whether users are returning to the mainnet, but: if L2 activity declines and mainnet Gas fees haven’t significantly decreased, where have these users gone? Some have flowed to competitors like Solana.

2. ETH falling by half from its peak isn’t scary; what’s scary is L2 only competing on Gas fees, not on innovation.

In 2021, the discussion was “How to scale ETH with L2,” and “which L2 tech is better.” Back then, the narrative was “technological innovation.”

But now, in 2026, the only narrative left for L2s is: “Our Gas fees are cheaper than others.”

This isn’t the first time V God has raised this issue, but at this stage, he’s emphasizing more frequently: L2s can’t just compete on Gas fees.

3. Retail investors focus on ETH price; veterans focus on L2 ecosystem — that’s the difference of five years’ experience.

Retail logic: ETH has fallen by half from its peak, it’s too cheap!
Veteran logic: ETH has fallen, but the marginal growth of L2 is also slowing, indicating ecosystem problems, so they wait and see.

What’s the difference?
Retailers look at price; veterans look at the ecosystem. Price is the result, ecosystem is the cause. If the ecosystem continues to deteriorate, the price will keep falling.

4. It’s not about whether ETH will rebound, but whether L2 can come up with new things.

Historically, every ETH ecosystem crisis has required a “technical solution,” not a price rebound.

In 2021 Gas fee crisis, L2 launched solutions.
In 2023 MEV crisis, Flashbots launched MEV-Boost.
In 2026 L2 crisis, L2 needs to introduce “value beyond low Gas fees” to resolve it.

If L2 can’t come up with new innovations, the ETH ecosystem may continue to worsen.

Three Signal Indicators for L2 Crisis

After a sharp drop in L2 usage, don’t blindly buy the dip or sell off, but observe three key signals to assess ETH ecosystem health.

Signal 1: L2 Usage Trend
If L2 usage continues to decline → ETH ecosystem innovation stagnates → Wait and see
If L2 usage rebounds → indicates new applications/functions attracting users → Consider building positions

Signal 2: Mainnet Gas Fees
Mainnet Gas fees haven’t returned to the 2021 high levels, but for ordinary users, it’s still unfriendly for daily use.

Signal 3: Performance of Competing Chains
When the activity of competing chains rises in tandem, this is a warning signal.

Execution Strategy

All three signals worsen (L2 continues to decline + Gas fees not significantly lower + competing chains active)
Sell or reduce ETH holdings, switch to BTC or wait and see

Two signals worsen
Wait and see, do not build new positions

One signal worsens or all three improve
Gradually build positions (first batch 20%, second batch 30%, third batch 50%) — strict rule
Stop-loss line: if ETH drops another 15% (about $1870) and L2 usage continues to decline, sell off
Don’t buy the dip just because “ETH has fallen by half from its peak,” but watch whether “L2 ecosystem recovers and grows.”

Current Status
L2 Usage: Marginal growth slowing → needs attention
Mainnet Gas Fees: Not back to historical highs, but still unfriendly → needs attention
Competing Chains: Activity rising → needs attention
Although signals indicate ecosystem growth slowing, more data should be observed before making a judgment.

Historical Validation: Past ETH ecosystem crises
Case 1: 2021 Gas fee crisis
Issue: ETH Gas fees soared to 200 Gwei, users shifted to BSC/Polygon
Price performance: ETH dropped from $4800 to $1700
Solution: L2 (Arbitrum, Optimism) launched, reducing Gas fees
Follow-up: After 6 months of L2 launch, ETH rebounded +120%

Case 2: 2023 MEV crisis
Issue: Miners front-run transactions, trust in the network declined
Price performance: ETH dropped from $2100 to $1500
Solution: Flashbots launched MEV-Boost, alleviating MEV issues
Follow-up: After 3 months of MEV-Boost, ETH rebounded +45%

Every ETH ecosystem crisis requires a “technical solution,” not just a price rebound.
In 2021, L2 solved Gas fee issues; in 2023, Flashbots solved MEV issues.
In 2026, the L2 crisis will require L2 to introduce “value beyond low Gas fees” to resolve.

This isn’t the first time V God has raised this question, but at this stage, he’s emphasizing more frequently: this isn’t just a routine warning, but a very clear reminder of the technical roadmap.

V God has provided a direction — like privacy features (zkSync), new virtual machines (Starknet’s Cairo VM), plus some on-chain social features.

Honestly, if you understand these three signals, you should be waiting on the sidelines now, not heavily invested in ETH.

If this article was helpful, share it with your ETH holding friends. With a methodology in hand, you won’t panic.