Ethereum’s Rally Faces Headwinds Despite Price Recovery

Ethereum (ETH) saw its price increase 9% recently, recovering from a $3,355 low, but underlying market metrics suggest trader confidence remains fragile regarding long-term momentum.

Key Takeaways

• Ethereum’s futures and options data indicate neutral-to-bearish sentiment.
• Institutional ETF outflows and weak catalysts are constraining ETH’s ability to significantly surpass $3,800.

While Ether (ETH) has gained from its July 28 low, closely tracking broader altcoin market capitalization, derivatives indicators signal continued caution.

Altcoin market cap peaked near $1.3 trillion shortly after Ether hit its highest point in 2025. However, ETH stalled around the $4,000 level later in July. Unlike a weakness confined to Ethereum, this likely reflected reduced overall investor risk appetite.

The Ether 3-month futures premium is currently at a 5% level, reaching the neutral-to-bearish threshold. This contrasts with the $3,900 level achieved recently, which failed to generate positive signals.

Ethereum’s TVL Decline Hampers Sentiment

Decreasing activity on decentralized applications (DApps) evident in the Total Value Locked (TVL) metric contributes to investor caution. ETH TVL dropped 9% over the last 30 days to $23.8 million, maintaining its dominance with a ~59% global share, though outpaced by growth on BNB Chain and Solana.

Matters are further underscored by data from ETH options markets. The 25% delta put-call skew indicator registered 6%, another sign of neutral-to-bearish sentiment.

Eth ETF Outflows Signal Weaker Institutional Demand

Institutional demand for ETH has cooled, reflected in the asset’s pricing variations across exchanges. Coinbase and Kraken currently show slightly lower prices compared to Binance and Bitfinex.

This follows $129 million in net outflows for Ether spot exchange-traded funds in the past week. This dampened sentiment amidst broader market risk aversion, as triggered by lingering concerns over trade wars and potential US economic weakness.

The analysis suggests ETH lacks a compelling catalyst to break above the $3,800 level short-term and continues to move in tandem with the overall altcoin market, absent renewed institutional inflows.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.