Ether Gains 9% But Traders Remain Cautious

Ether (ETH) experienced a 9% gain between Tuesday and Thursday, but failed to surpass the $2,600 mark. Traders highlighted a bullish technical pattern known as a “golden cross,” which they believed could drive ETH to $3,200, a level last seen in January. However, derivatives data indicates that ETH traders are not as bullish as the technical analysis suggests.

Despite ETH’s price rally, there was no significant increase in demand for leveraged long positions. In a neutral market, monthly contracts typically trade at a 5% to 10% annualized premium over spot prices. Currently, the Ether futures premium remains below the 5% neutral threshold, even after recent price gains. The last time this indicator signaled a bullish stance was Jan. 26, when ETH traded near $3,300. Notably, that date aligns with the launch of the Official Trump (TRUMP) memecoin on Solana, which boosted that blockchain’s volumes and revenue.

Ethereum’s layer-2 growth has not translated into increased demand for ETH due to low rollup transaction fees. Much of the ecosystem’s DApp revenue now flows to layer-2 solutions like Base, Arbitrum, Polygon, Optimism, and Unichain. Additionally, Solana has faced criticism for its maximal extractable value (MEV) practices, which allow validators to reorder transactions for profit. This narrow analysis overlooks Ethereum’s strategic shift toward layer-2 scaling, where rollups incur extremely low fees for data processing, encouraging adoption, but they don’t generate meaningful demand for ETH itself.

To gauge whether professional traders are losing confidence in ETH’s price rally, it’s useful to examine the ETH options delta skew. In bearish conditions, put (sell) options tend to trade at a premium over comparable call (buy) options, pushing the indicator above the 6% neutral threshold. Currently, the ETH options skew sits at 1%, suggesting traders see equal likelihood of price moves in either direction, a reading unchanged from the previous week.

The lack of confidence in Ether derivatives reinforces the notion that traders have little conviction in ETH’s ability to reclaim the $3,200 level. Some of that caution likely stems from the launch of the first spot Solana exchange-traded fund (ETF) in the United States on Wednesday. Not only did the Solana ETF undercut ETH’s leadership among altcoins, but it also raised the bar by incorporating embedded staking. Unless Ethereum can provide ETH holders with direct benefits from tokenization and institutional adoption, a sustained rally in the near term appears unlikely.