Ether is holding $2,000 but could remain under pressure as traders eye corporate earnings, US government debt and rising global tensions.
Key Takeaways:
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Institutional demand for Ether is weakening as investors turn to the protection of short-term U.S. Treasury bonds.
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High rates of interest and an increasing ETH supply make the present stake yield less attractive for long-term holders.
The price of Ether (ETH) has failed to take care of the extent above $2,150 since February 5, leading traders to fear one other correction. Investor sentiment deteriorated on account of outflows from Ether exchange-traded funds (ETFs) and increased demand for put (sell) options.
Daily net inflows of US-listed Ether ETFs, USD million. Source: Farside Investors
U.S.-listed Ether ETFs recorded net outflows of $242 million between Wednesday and Thursday, reversing the trend of the previous two days. Institutional demand following the 20% rally in Ether price from its low of $1,744 on February 6 has weakened as investors noted discrepancies in U.S. economic growth – evidenced by growing demand for short-term U.S. Treasury bonds.
Yield on two-year US Treasury bonds. Source: TradingView
The two-year U.S. Treasury yield fell to three.42% on Friday, nearing its lowest level since August 2022. The higher demand for government-backed debt reflects traders' expectations of further rate of interest cuts from the Federal Reserve (Fed) throughout 2026. Signs of economic stagnation reduce inflation risks and pave the way in which for expansionary measures.
Regardless of macroeconomic trends, Ether has underperformed the broader cryptocurrency market, leading traders to query whether Ethereum still has what it takes to compete with networks that provide base-level scalability and faster on-chain activity.
Traders fear ETH price will fall even further, but the info appears to reflect recent price weakness relatively than expectations of one other crash.
ETH/USD (orange) vs. total crypto capitalization (blue). Source: TradingView
The price of Ether has fallen by 38% in 30 days, negatively impacting the network's fees and ultimately reducing incentives for staking. Long-term holding is a vital component for sustained price growth, and the present staking yield of two.9% is way from attractive considering the Federal Reserve's goal rate of interest is 3.5%. Additionally, the ETH supply is growing at an annual rate of 0.8%.
ETH derivatives metrics reflect traders’ fears of further price declines
According to ETH derivatives metrics, skilled traders will not be comfortable taking downside price risks, further adding to the bearish sentiment.
ETH 30-day options delta skew (put call) at Deribit. Source: Laevitas.ch
ETH options delta skew was 10% on Friday, meaning put (sell) options were trading at a premium. The increased demand for neutral to bearish strategies is causing the indicator to maneuver above the 6% threshold that has been common for 2 weeks. Trader sentiment reflects a six-month bear market as ETH trades 58% below its all-time high.
From a broader perspective, just $242 million in Ether ETF outflows represents lower than 2% of the entire $12.7 billion in assets under management; Therefore, traders shouldn’t assume that ETH price has entered a death spiral. Investor sentiment will eventually recuperate because the network continues to be absolutely the leader in Total Value Locked (TVL).
Traders' attention will likely remain focused on corporate earnings results and whether the U.S. government will give you the chance to refinance its debt amid rising global socioeconomic tensions. In this scenario, ETH price will likely proceed to stay under pressure, no matter on-chain and derivatives metrics.
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