Declining ETF inflows, weaker derivatives data, and global economic uncertainty have left Ethereum under pressure despite steady on-chain engagement.
Ethereum is showing signs of strain as weak institutional demand and fading trader confidence continue to weigh on its price performance. Despite a brief rebound above $3,400, Ether (ETH) has fallen nearly 11% over the past week, struggling to regain momentum toward the $3,900 resistance level. Analysts point to ETF outflows, macro headwinds, and a decline in decentralized finance (DeFi) activity as major contributors to the current stagnation.
Investor Sentiment Remains Muted
Data from derivatives markets shows Ether futures are trading at a 4% premium, signaling that bullish appetite remains limited. Under typical market conditions, this premium ranges from 5% to 10%, highlighting reduced optimism among leveraged traders.
“Market participants are clearly cautious,” one digital asset analyst noted. “While there’s no panic selling, the lack of conviction in long positions suggests traders are waiting for stronger catalysts before re-entering.”
Adding to the unease, U.S. consumer sentiment recently dropped to its lowest level since the 1970s, amplifying concerns about a potential economic slowdown and diminishing risk appetite across global markets.
DeFi and On-Chain Activity Show Mixed Signals
Ethereum’s total value locked (TVL) dropped to $74 billion, the lowest since July, marking a 24% decline in 30 days. The recent $120 million exploit on Balancer v2 further dampened market confidence. Meanwhile, DApp revenues fell 18% in October to $80.7 million, reflecting reduced user engagement and transaction volume.
However, on-chain data provides a glimmer of resilience. Active Ethereum addresses increased by 5%, and transactions rose by 2% in early November, outperforming competing blockchains such as Tron and BNB Chain.
ETF Outflows Underscore Lack of Institutional Demand
Ethereum spot ETF products in the U.S. recorded $507 million in net outflows in November, signaling cooling institutional interest. Without new inflows or large corporate purchases, market sentiment remains subdued.
“The absence of strong ETF demand means Ethereum lacks immediate bullish momentum,” said one strategist. “Investors are watching for the next network upgrade to revive enthusiasm.”
The upcoming Fusaka upgrade, expected in early December, could boost scalability and security. Still, with weak derivatives indicators and macro uncertainty lingering, Ethereum faces an uphill battle to reclaim $3,900 in the short term.
Unless broader risk sentiment improves, ETH’s recovery may remain capped, and traders could continue favoring safer digital assets until stronger demand returns.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.