Ether Faces Headwinds Amid Bearish Derivatives Metrics
Despite a recent price surge, Ether’s (ETH) futures and options data reveal a cautious atmosphere among traders. The cryptocurrency has climbed 9% from a low of $3,355, yet skepticism remains prevalent, as many are questioning the sustainability of this recovery as ETH grapples with the key resistance level of $3,800.
Market Sentiment: A Bearish Tone
The current market environment for Ether mirrors the overall altcoin market, which recently reached a capitalization of $1.3 trillion. Although this was accompanied by Ether hitting its peak for 2025, the inability to breach the $4,000 mark is reflective of a broader decline in investor sentiment rather than an issue specific to the Ethereum ecosystem. Traders are showing increased reluctance, highlighting that the optimistic momentum might not hold.
The 3-month futures premium for Ether now sits at 5%, signaling neutral-to-bearish sentiment. This is significant since the previous price level of $3,900, achieved shortly before, failed to inspire a bullish turnaround in the market. The bearish outlook raises questions about the next steps for Ether in the upcoming weeks.
Declining Institutional Demand and TVL Issues
Underlying investor apprehension stems from the 9% decline in total value locked (TVL) on Ethereum, down to ETH 23.8 million over the past month. Comparatively, BNB Chain has seen an 8% rise in TVL, while deposits for Solana DApps increased by 4%, suggesting that Ethereum is losing ground in the decentralized finance (DeFi) sector. Despite holding a dominant 59% share of total TVL in USD terms, these losses can’t be overlooked.
Moreover, the 25% delta skew in the ETH options market has reached a critical neutral-to-bearish threshold of 6%. This skew indicates that traders are increasingly seeking protective put options as they assess risks, suggesting that the bullish sentiment needed for a significant upswing is absent.
Institutional demand also appears to be waning, evidenced by a noticeable discount on ETH prices on platforms like Coinbase and Kraken compared to Binance and Bitfinex. This shift implies reduced buying interest from institutional investors, particularly when ETH spot exchange-traded funds (ETFs) recorded net outflows of $129 million recently.
The absence of clear catalysts capable of lifting Ether above the significant price barrier of $3,800 adds further pressure. With persistent global trade tensions and uncertainty surrounding the U.S. job market, sentiment remains muted. The hesitance observed among traders reflects a cautious stance as economic indicators reveal that businesses may be stockpiling goods amidst rising tariffs.
As it stands, Ether’s trajectory remains closely linked to the overall dynamics of the altcoin market. Without a shift in institutional inflows or a significant bullish catalyst, ETH may continue to navigate a challenging landscape, leaving investors on edge regarding the cryptocurrency’s next moves.