Ether Surges 17% to $2,470 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 brought ETH from a Sunday low of $2,115, marking a 17% jump. However, despite this price movement, professional traders remain cautious about adopting a bullish stance. The geopolitical climate, which initially seemed to improve, did not translate into strong bullish conviction among traders.

One key indicator of this hesitancy is the 2-month futures annualized premium, which slipped to a bearish 3% level. In neutral markets, ETH monthly futures typically trade at a 5% to 10% annualized premium. This drop suggests a lack of interest in leveraged long positions, a trend that has persisted since June 12, when ETH failed to hold above $2,700. This data indicates that traders are not fully convinced about the sustainability of the recent price increase.

Another factor contributing to the weak bullish outlook is the significant mismatch between Ether’s market capitalization and its modest network fees. Ether’s market capitalization stands at $293 billion, while its monthly network fees are only $41 million. This discrepancy raises concerns about the sustainability of staking rewards without inflating the ETH supply. Network activity must increase substantially to support the current market capitalization and staking rewards.

Ethereum’s dominance in total deposits is also being challenged by other networks. While Ethereum leads in total value locked (TVL) with $66 billion, its fees are only $8 million higher than those of Solana, which has a TVL of $10 billion. More strikingly, Tron collects $56 million in monthly fees despite having under $5 billion in TVL. This competition from other networks further weighs on Ether’s price outlook.

The options market also provides insights into the sentiment among large investors. The skew metric, which measures the cost of downside protection, has remained within the neutral zone, briefly approaching bearish territory on Sunday. This indicates that traders expect a consolidation above $2,800 to trigger a bullish shift. However, the absence of a skew below -5% since June 11 suggests that traders are not yet convinced about a strong bullish trend.

More than 20 weeks have passed since Ether last traded above $3,000, leading to a gradual erosion in trader confidence. The intensifying competition in decentralized application (DApp) activity, particularly from Solana and BNB Chain, also contributes to the lack of renewed optimism. Unless Ethereum can differentiate itself through tangible institutional adoption or network dominance, ETH is unlikely to surpass the $3,000 mark in the short term.