Ethereum traders remain cautious despite a significant 56.5% price increase and substantial inflows into new spot exchange-traded funds (ETFs), citing stagnant network activity and intensifying competition from alternative layer-1 blockchains.
These concerns are validated by key on-chain metrics. Ethereum’s total value locked (TVL), converted to USD at current prices, suffered an 11% decline to approximately $83 billion, marking a five-month low. While Solana’s TVL also decreased by 4% during the same period, BNB Chain experienced a contrasting 15% growth in deposits.
Further emphasizing the competitive challenge, Ethereum relinquished its lead in decentralized exchange (DEX) trading volume. Over 30 days, it processed $81.4 billion compared to Solana’s $82.9 billion and BNB Chain’s dominant $189.2 billion.
Derivative market sentiment reflects this caution. The 3-month ETH futures annualized premium dropped to 6% from 8%, pointing to a more neutral stance among professional traders. Similarly, the annualized funding rate for ETH perpetual futures declined to 9%, signaling reduced demand for leveraged bullish positions.
Despite the caution, significant institutional holdings persist. At least nine publicly listed companies each hold over 2,000 ETH. Continued buying pressure from such entities could potentially push ETH prices towards the $5,000 level, though trader skepticism currently reinforces strong resistance around $4,000.
Ultimately, the stagnation in Ethereum’s network activity and persistent decline in core on-chain metrics like TVL dampen investor confidence, overriding the positive signals from the price surge and ETF interest.