Ether Surges 10% to $2,660 on Iran-Israel Ceasefire News

Ether (ETH) experienced a significant surge, reaching $2,470, following a response from investors to news of a ceasefire between Iran and Israel. This increase came after a low of $2,115 on Sunday, driven by a reduction in geopolitical risks that also led to a drop in oil prices to a two-week low. Despite this positive geopolitical development, professional Ether traders have shown hesitation in adopting a bullish stance.

In neutral markets, ETH monthly futures typically trade at a 5% to 10% annualized premium to account for the extended settlement period. However, on Tuesday, this indicator slipped to a bearish 3% level, indicating a lack of interest in leveraged long positions. This trend has persisted since June 12, after ETH failed to hold above $2,700. The hesitation among traders is further evidenced by the fact that the 2% skew in ETH options markets falls well within the neutral zone, although it briefly approached bearish territory on Sunday. More notably, ETH options haven’t shown a skew below -5% since June 11, implying that traders expect a consolidation above $2,800 to trigger a bullish shift.

Investor concerns also revolve around the mismatch between Ether’s $293 billion market capitalization and its modest $41 million in monthly network fees. This discrepancy raises sustainability concerns, as network activity must increase substantially to sustain staking rewards without inflating the ETH supply. While Ethereum leads in total deposits, its fees are just $8 million higher than those of Solana. For context, Ethereum's total value locked (TVL) is $66 billion, compared to Solana’s $10 billion. More strikingly, Tron collects $56 million in monthly fees despite having under $5 billion in TVL. This intensifying competition in decentralized application (DApp) activity, particularly from Solana and BNB Chain, has contributed to the gradual erosion in trader confidence.

Despite US-listed Ether exchange-traded funds (ETFs) recording $101 million in net inflows on Monday, reversing the $11 million in outflows seen on Friday, the factors holding back bullish leverage demand are unlikely to shift simply because ETH rose 10% to $2,660 or because ETFs draw an additional $300 million in inflows. More than 20 weeks have passed since Ether last traded above $3,000, and it remains unclear what could reignite strong buying interest in ETH. A durable bullish trend will likely require a clear competitive edge. Unless Ethereum differentiates itself through tangible institutional adoption or network dominance, ETH is unlikely to surpass the $3,000 mark in the short term.