ETH Hits $3.4K But Several Factors Put A Pause On Ether’s Rally

Key takeaways:

ETH derivatives flash caution as pro traders remain neutral-to-bearish, and weak DApps demand and falling fees pressure Ether’s price.

Corporate ETH buying and spot ETF inflows have not restored investor confidence, as lower staking yields and soft network activity persist.

Ether (ETH) price experienced a two-day 4% correction after briefly reaching $3,400 on Wednesday. The move caught bulls by surprise, triggering $65 million in liquidations of leveraged long ETH futures. More importantly, professional traders have maintained a neutral-to-bearish stance, according to derivatives markets, despite ETH reaching its highest level in two months.

ETH monthly futures traded at a 4% annualized premium (basis rate) relative to spot markets on Friday. Levels below 5% are deemed bearish, as sellers typically demand a premium to compensate for the longer settlement period. This lack of confidence can be partially explained by a sharp downtrend in the broader cryptocurrency market, while gold and the S&P 500 index jumped to all-time highs in 2026.

Ether’s drop to $3,280 closely matches the 28% decline in total cryptocurrency market capitalization since Oct. 6, 2025. Lower interest in decentralized applications (DApps) has weighed on prices, especially after demand for memecoin launches and trading activity faded. New entrants are essential to stimulate blockchain activity, fees and demand for native tokens.

Ethereum base layer transactions grew by 28% over 30 days, but network fees fell by 31% versus the standardized average. By comparison, transactions on competitors Solana and BNB Chain remained relatively stable, while fees jumped by 20% on average. More concerning, Ethereum’s largest scaling solution, Base, saw a 26% decline in transactions over the same period.

ETH momentum weak amid low fees, DApps demand, and staking risks

Whales and market makers are highly sensitive to overall network usage, as Ethereum has a built-in mechanism that burns ETH during periods of excessive demand for blockchain data processing. Lower network activity reduces ETH staking returns, leaving investors less incentivized to hold positions. Currently, 30% of the total ETH supply remains locked in staking.

Regardless of 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) in the United States recorded a modest net inflow of $123 million since Jan. 7, while publicly listed companies that purchased ETH remain mostly underwater.

Bitmine Immersion (BMNR US) market capitalization stood 13% below the $13.7 billion worth of ETH held in its corporate reserves. Similarly, Sharplink (SBET US) holds $2.84 billion worth of ETH, while the company’s market capitalization totaled $2.05 billion. Even as these companies continue to acquire ETH at current levels, investor confidence in the cryptocurrency continues to erode.

ETH put (sell) options traded at a 6% premium relative to call (buy) instruments on Friday, a level considered the threshold of a neutral-to-bearish market. Ether professional traders appear less comfortable holding downside price exposure, signaling low expectations for a bullish breakout to $4,100 in the near term. 

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The decline in network fees further reduces the likelihood of a sustained bullish momentum. Ultimately, ETH price appears heavily dependent on external factors rather than developments within the Ethereum ecosystem itself. Professional traders’ skepticism reflects weak demand for DApps and concerns over potential outflows from the ETH native staking program.