Ethereum News Today: Ethereum spot price jumps 56.5% but derivatives show weak bullish momentum

Ethereum derivatives markets show little bullish momentum despite a 56.5% increase in the spot price of ETH over the past 30 days, raising questions about the cryptocurrency’s ability to break above the $4,000 threshold. Key indicators, including perpetual funding rates and futures premiums, suggest a lack of conviction in a sustained price breakout, with traders adopting a more cautious stance. This divergence between spot price performance and derivatives activity highlights uncertainty in the market [1].

Annualized funding rates for Ether perpetual futures have dropped to 9%, down from a 19% peak earlier in the week. The decline reflects reduced demand for leveraged long positions and signals a more measured approach by traders. Additionally, the annualized premium for ETH 3-month futures has settled at 6%, maintaining a neutral stance over the past three weeks [1]. These figures contrast with the recent strength observed in spot markets, indicating that traders remain skeptical about Ethereum’s near-term potential to surpass $4,000.

On-chain data further supports the cautious sentiment. The Total Value Locked (TVL) in the Ethereum network has fallen to a five-month low of 23.4 million ETH, an 11% drop from the previous month. This trend contrasts with Solana and BNB Chain, where TVL has remained stable or increased. BNB Chain, in particular, reported a 15% rise in deposits [1]. Ethereum also ceded its lead in decentralized exchange (DEX) trading volume, with BNB Chain recording $189.2 billion in DEX activity over the past 30 days, compared to Ethereum’s $81.4 billion [1].

Network activity remains a key area of concern. Stagnant transaction fees and declining user engagement raise doubts about Ethereum’s ability to maintain its competitive edge against more scalable blockchain platforms. While Ethereum continues to lead in TVL and developer activity, its market share in on-chain usage is being eroded by faster and more cost-effective alternatives [1].

Corporate holdings of Ethereum, including companies such as Bitmine Immersion Tech and The Ether Machine, have contributed to recent price gains. However, these holdings have not translated into stronger derivatives demand or price momentum. The market remains uncertain whether corporate buying will be enough to push ETH toward $5,000, particularly given the broader market dynamics and growing competition [1].

Despite the uncertainty, some market participants remain cautiously optimistic. A Reddit user from the Ethereum trading community noted that derivatives markets show no signs of overextension, suggesting that the market is not overbought [3]. However, the lack of significant bullish leverage demand at current price levels, combined with the growing dominance of Solana and BNB Chain, indicates that the $4,000 level remains out of reach.

To regain momentum, Ethereum will need to see a rebound in on-chain activity, renewed confidence among traders, and continued inflows into spot ETFs. For now, the market is in a holding pattern, with participants waiting for 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/)