Ethereum Price at Risk as UK Regulators Move to Ban $102 Billion DeFi Loan Market

Ethereum price hits 60-day peaks above $1,860 driven by institutional interest in Bitcoin, UK regulators proposed ban on DeFi loan markets highlights major risks ahead

Ethereum (ETH) Taps New 60-Day Peaks as Institutions Amplify Bitcoin Demand

Ethereum (ETH) extended its bullish momentum on Friday, surging to a fresh 60-day high above $1,865. The rally comes as institutional demand from Bitcoin ETFs reach historic-peaks.

Much of the upside pressure is traced to unprecedented inflows into spot Bitcoin ETFs, which recorded over $4 billion in cumulative acquisitions during nine consecutive days of buying.

This development has spread bullish tailwinds towards the broader altcoin sector, with ETH price evidently benefitting indirectly from renewed investor interest on Friday.

Further fueling sentiment, MicroStrategy announced plans to raise additional capital for Bitcoin accumulation, reinforcing market expectations for sustained institutional engagement.

While Ethereum’s own use case differs, its market value has historically responded positively to macro crypto inflows, as traders anticipate secondary momentum into Layer-1 altcoins.

UK Regulators Move to Ban Crypto Loans with Credit Cards

The UK’s Financial Conduct Authority (FCA) unveiled a proposed ban on crypto-backed lending, signaling a regulatory shift that could have deep repercussions for decentralized finance (DeFi).

The policy targets the growing practice of issuing loans against crypto assets, citing systemic risks to consumer protection and the broader financial system.

The proposal follows closed-door consultations with the Bank of England and other global financial regulators. At the heart of the crackdown is concern over under-collateralized loans and opaque decentralized credit systems. The FCA’s framework would prohibit UK-based platforms from offering loans secured by crypto assets, including stablecoins and major tokens like Bitcoin and Ether.

The draft legislation is currently open for public feedback, with a 90-day comment window preceding final parliamentary review scheduled for Q3 2025.

DeFi Crackdown Could Further Erode Ethereum’s Market Share

The FCA’s proposed ban threatens to deliver a significant blow to the DeFi ecosystem—an area where Ethereum remains the dominant platform.

As of Friday, total DeFi lending and staking value locked (TVL) reached $101.7 billion, with Ethereum accounting for $51.9 billion, or 52% of total market share. This is notably down from its 71% peak during the 2021 bull market, according to DeFiLlama.

Should the UK’s ban proceed, major Ethereum-hosted protocols like Aave, Compound, and Lido may see declining user activity and capital inflow from the region. In particular, UK-based liquidity providers and institutional platforms may reduce exposure to DeFi entirely, weakening the ecosystem’s depth.

Staking rewards, which depend heavily on borrowing volume and token utility, are also at risk. Lower lending activity could compress yields, potentially triggering a cascading withdrawal effect across Ethereum’s staking protocols. In this scenario, Ethereum’s overall cryptoccurrency market share could decline further.

Ethereum Price Forecast Today: ETH Targets $1,920 as Bullish Structure Strengthens

Ethereum price is gradually carving out a bullish structure as it continues to pressed the $1,865 barrier on Friday. The ETH price action has shown resilience in recent sessions, holding firmly above the 20-day exponential moving average at $1,754—a level that has quietly become a foundation for this uptrend.

As seen below ETH candles have grown tighter near the top of their daily ranges, suggesting mounting pressure from buyers, even as broader market sentiment remains cautious.

The Ethereum price forecast today points to a cautiously optimistic outlook. With the Relative Strength Index rising to 58.02, momentum is building but not yet overextended. The Parabolic SAR has shifted firmly beneath the price since late April, reinforcing the narrative that upward momentum is becoming more entrenched. Meanwhile, the Bollinger Band Percent at 140.12 indicates growing volatility, a common precursor to breakout activity when paired with narrowing consolidation.

If Ethereum can push cleanly above the 50-day EMA resistance around $1,858, bulls could find enough conviction to propel prices toward the $1,920 zone. But the structure remains vulnerable to a pullback if this momentum stalls, with $1,754 likely to act as the key support threshold where sentiment could pivot once more.