Key Takeaways:
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ETH derivatives raise caution as pro traders take a neutral to bearish stance and weak demand for DApps and falling fees put pressure on Ether's price.
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Corporate ETH purchases and spot ETF inflows have did not restore investor confidence as lower staking returns and weak network activity persist.
The price of Ether (ETH) experienced a two-day correction of 4% after briefly hitting $3,400 on Wednesday. The move surprised bulls and triggered the liquidation of $65 million in leveraged long ETH futures. More importantly, skilled traders have maintained a neutral to bearish stance despite ETH hitting its highest level in two months, in accordance with derivatives markets.
ETH 2-month futures base rate. Source: laevitas.ch
ETH monthly futures traded at an annual premium (base rate) of 4% in comparison with spot markets on Friday. Values below 5% are considered pessimistic because sellers typically charge a premium to compensate for the longer settlement time. This insecurity may be partly explained by a powerful downtrend within the broader cryptocurrency market, while gold and the S&P 500 index jumped to all-time highs in 2026.
ETH/USD (left) vs. total cryptocurrency capitalization (right). Source: TradingView
Ether's drop to $3,280 roughly corresponds to the 28% drop within the cryptocurrency's total market cap since October 6, 2025. Lower interest in decentralized applications (DApps) has weighed on prices, especially after demand for memecoin launches and trading activity slowed. New market entrants are essential to spice up blockchain activity, fees, and demand for native tokens.
Top Blockchains Ranked by 30 Day Network Fees, USD. Source: Nansen
Ethereum base layer transactions increased by 28% in 30 days, but network fees fell by 31% in comparison with the standardized average. In comparison, competitors Solana and BNB Chain's transactions remained relatively stable, while fees increased by a median of 20%. Even more worrying, Base, Ethereum's largest scaling solution, saw a 26% decline in transactions over the identical period.
ETH momentum is weak as a result of low fees, DApps demand, and staking risks
Whales and market makers are very sensitive to overall network usage because Ethereum has a built-in mechanism that burns ETH during times of excessive demand for blockchain data processing. Lower network activity reduces ETH staking returns, giving investors less incentive to carry positions. Currently, 30% of the full ETH supply continues to be locked in staking.
Whether Ether's lack of bullish momentum simply reflects weaker DApps demand, traders are unlikely to regain confidence while institutional flows remain neutral. Ethereum spot exchange-traded funds (ETFs) within the United States have seen a modest net inflow of $123 million since January 7, while publicly traded corporations which have purchased ETH remain largely underwater.
Bitmine Immersion's (BMNR US) market cap was 13% lower than the $13.7 billion ETH value held in its corporate reserves. Likewise, Sharplink (SBET US) holds $2.84 billion price of ETH, while the corporate's total market cap was $2.05 billion. Even if these corporations proceed to buy ETH at current levels, investor confidence within the cryptocurrency continues to wane.
ETH options 30-day delta skew (put call) at Deribit. Source: laevitas.ch
ETH put (sell) options traded at a 6% premium to call (buy) instruments on Friday, a level considered the brink of a neutral to bearish market. Professional Ether traders appear less comfortable maintaining downside price risks, suggesting they’ve low expectations of a bullish breakout to $4,100 within the near term.
The decline in network fees further reduces the likelihood of sustained bullish momentum. Ultimately, the ETH price appears to be heavily depending on external aspects moderately than developments inside the Ethereum ecosystem itself. The skepticism from skilled traders reflects weak demand for DApps and concerns about possible outflows from the ETH native staking program.
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