Ethereum (ETH) has surged over 56.5% in the last 30 days, yet metrics from derivatives markets show trader caution. This hesitance relates to Ethereum's ongoing challenges to surpass the $4,000 mark and weak network activity.
Trader Caution Amid Price Surge
The recent drop in the annualized funding rate for ETH perpetual futures to 9% indicates decreased demand for leveraged bullish positions. This sharply contrasts with the 19% funding rate seen earlier in the week and surprisingly aligns with levels observed when ETH was trading near $2,600 in early July, despite a 46% price increase since then.
Declining Ethereum Deposits
Trader skepticism is also fueled by an 11% decline in network deposits. The Total Value Locked (TVL) on Ethereum has fallen to a five-month low of 23.4 million ETH, down from 26.4 million a month ago. In comparison, Solana's TVL decreased just 4% in SOL terms, while BNB Chain's deposits increased by 15% in BNB terms.
DEX Market Competition and Corporate Holdings
Ethereum has also been overtaken in decentralized exchange (DEX) volume by competitors. Over a 30-day period, Ethereum recorded $81.4 billion in DEX activity, while Solana reported $82.9 billion and BNB Chain led with $189.2 billion. Furthermore, significant corporate holdings of Ether raise questions about future price momentum.
Despite recent price increases, trader caution and stagnant network activity indicate uncertainty for Ethereum. Competition from Solana and BNB Chain also adds pressure, potentially impacting Ethereum's future development.
