Ether (ETH) briefly touched $3,400 this week before cooling to around $3,289, marking a two-day 4% correction. The drop triggered roughly $65 million in liquidations of leveraged ETH futures highlighting that professional traders remain neutral-to-bearish, even as ETH reached a two-month high.
Derivatives Signal Low Confidence
ETH two-month futures traded at a 4% annualized premium relative to spot markets—below the 5% threshold typically seen as bullish. This indicates that sellers are pricing in caution for longer settlement periods, reflecting broader market skepticism. Put-call ratios on ETH options also suggest moderate bearish sentiment, with traders reluctant to hold downside risk exposure.
Lower network usage is contributing to soft market sentiment. Although Ethereum base layer transactions rose 28% over 30 days, network fees fell 31%, reducing staking rewards and diminishing incentives for holding ETH. Major scaling solutions, including Base, saw transaction volumes decline 26%, while competing blockchains like Solana and BNB Chain maintained stable activity.
Institutional Flows Provide Limited Support
Despite corporate ETH purchases and modest $123 million spot ETF inflows since January 7, institutional and public investor confidence remains muted. Companies holding ETH on their balance sheets are often trading below the value of their crypto reserves, signaling that market participants are not yet ready to drive a sustained bullish trend.
Overall, ETH’s price momentum depends heavily on broader macro conditions and network usage, rather than solely on ecosystem developments. Weak DApps demand, falling fees, and low staking yields continue to weigh on professional traders’ outlook, keeping sentiment cautious in the near term.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.