The price of Ether ( $ETH
) associated with Ethereum fell significantly last week, dropping by 7% at the time of writing this report. While the asset is still up over 30% in the last 30 days, the sudden drop certainly raises concerns for investors. Further increases in Ether's price seem unlikely due to weak network activity and increased competition from other coins.
Several factors contribute to the decline in Ethereum. Total deposits on the Ethereum network, measured by Total Value Locked (TVL), fell to 25.1 million Ether on June 5, marking a 17% decrease from the previous month. Major contributors to the decrease in Ethereum's TVL include S,ky (formerly known as Maker,,DAO), which dropped by 48% to 2.1 million Ether, and Curve,,Finance, which fell by 24% to 1.1 million Ether. Currently, competing coins like Bitcoin and Solana $SOL
in performance, causing investors to shy away from Ether.
Additionally, as of June 5, the Ether futures premium decreased to 5%, down from 6% last week. This indicates a slight decline in long positions supported by leverage, although the premium remains within the neutral range. The last time Ether futures traded above a 10% premium was in late January, indicating a continued lack of bullish conviction among investors.
Read also: BlackRock sold Bitcoin and bought Ethereum: Should you do it too?
On the other hand, Ether began to rise in early May after the Pec,tra update started. This update may have led to an increase in investor confidence. Ether recorded double-digit percentage growth in the daily charts at one point. Moreover, institutional interest in Ether has increased, bolstering support near the $2,500 level. Investors may expect Ether's price to rise in the coming weeks despite the drop this week.
While demand for Ether remains, especially from institutions, other metrics suggest that bulls are unlikely to break the $3,000 barrier in the near future. Analysts at Coin,,Codex observe the same, but suggest that this dip is a good time to buy Ethereum. "According to our current price forecasts for Ethereum, the price of Ethereum is expected to rise by 7.32% to reach $2,755.50 by July 4, 2025." By mid-July, Coin,,Codex suggests we will see Ether regain and exceed the $3,000 level.
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