Ethereum News Today: Ethereum derivatives show no bullish momentum despite 56.5% spot price surge

Ethereum derivatives show little bullish momentum despite a recent 56.5% surge in the ETH spot price over the past 30 days and ongoing inflows into Ethereum-based ETFs. The divergence between spot price gains and derivatives market data has raised concerns among traders about the cryptocurrency’s ability to break through the $4,000 psychological threshold—a level it has failed to surpass since March 2024 [1].

Derivatives metrics, including perpetual futures and monthly futures, indicate a cooling in speculative demand. The annualized funding rate for Ether perpetual futures dropped to 9% on Thursday, down from a 19% spike the previous week. This suggests reduced interest in leveraged long positions and a more cautious market sentiment [1]. The annualized premium for ETH 3-month futures has also declined to 6%, maintaining a neutral range over the past three weeks [1]. These figures contrast with the optimism suggested by the spot price, signaling a lack of conviction among traders.

On-chain metrics reinforce this caution. The total value locked (TVL) in the Ethereum ecosystem has fallen to a five-month low of 23.4 million ETH, representing an 11% drop from its level 30 days ago [1]. This decline contrasts with rival chains such as Solana and BNB Chain, where TVL has either remained stable or increased. BNB Chain, in particular, has seen a 15% growth in deposits [1]. Ethereum has also lost its lead in decentralized exchange (DEX) trading volume. Solana and BNB Chain reported higher 30-day DEX volumes, with BNB Chain leading the market at $189.2 billion [1].

Network activity remains a key concern for Ethereum’s long-term viability. Transaction fees are essential for sustaining validators and incentivizing decentralized application (DApp) development. However, stagnant network activity, compared to more user-friendly blockchains with higher base-layer capacity, has raised questions about Ethereum’s competitiveness [1].

Trader sentiment has also been shaped by concerns over corporate Ethereum holdings. Nine publicly listed companies now hold at least 2,000 ETH each, including Bitmine Immersion Tech, SharpLink Gaming, and The Ether Machine [1]. While this trend has contributed to recent price gains, it has not convinced traders of an imminent move above $4,000 [1].

Despite these challenges, some market participants remain cautiously optimistic, noting that derivatives markets have not shown signs of defensive positioning or excessive speculation [3]. However, the lack of significant bullish leverage demand at current price levels, combined with competitive pressures from Solana and BNB Chain, suggests that the $4,000 milestone remains out of reach [3].

Ethereum’s ability to regain momentum will depend on a combination of onchain activity rebound, renewed trader confidence, and sustained ETF inflows. For now, the market appears in a holding pattern, with traders awaiting clearer signals before committing to a breakout rally [1].

Source: [1] Will Ethereum Finally Break $4K? ETH Traders ... (https://cointelegraph.com/news/ethereum-derivatives-show-no-momentum-raising-doubts-over-4k-rally)

[3] Ethereum Investment & Trading Community (https://www.reddit.com/r/ethtrader/hot/)