A 7% drop in a week, has Ethereum (ETH) collapsed again? TVL plummets, premiums decline, do retail investors still dare to chase?

Ethereum (ETH) cryptocurrency has significantly declined over the past week, dropping 7% as of the time of writing this article. Despite the asset having increased by over 30% in the past 30 days, its sudden crash has undoubtedly raised concerns among investors. Due to weak network activity and intensified competition among other cryptocurrencies, the price of ETH is unlikely to rise further.

Many factors have contributed to the decline in Ethereum's price. On June 5th, the total deposits on the Ethereum network (measured by Total Value Locked (TVL)) fell to 25.1 million ETH, a decrease of 17% compared to the previous week. The main factors leading to the decline in Ethereum's TVL include a 48% drop in Sky (formerly MakerDAO) to 2.1 million ETH, and a 24% drop in Curve Finance to 1.1 million ETH. Currently, competitors Bitcoin and Solana (SOL) are performing better, leading investors to gradually move away from ETH.

Furthermore, as of June 5th, the futures premium rate for Ether has decreased from 6% last week to 5%. This indicates a slight reduction in leveraged long positions, but the premium rate remains within a neutral range. The last time the ETH futures premium rate exceeded 10% was at the end of January, indicating a sustained lack of bullish confidence among investors.

On the other hand, ETH began to rise after the launch of the Pectra update in early May. This upgrade may have triggered a surge in investor confidence. ETH recorded double-digit percentage gains on the daily chart at one point. Additionally, institutional investors' interest in ETH has increased, solidifying support near $2,500. Although there was a decline this week, investors may expect the price of ETH to rise in the coming weeks.

Despite the ongoing demand for ETH, particularly from institutional investors, other indicators suggest that bulls may struggle to break through the $3,000 mark in the short term. Analysts at CoinCodex have noted the same viewpoint, but they believe that this decline is a good opportunity to buy Ethereum. "Based on our current price prediction for Ethereum, we expect the price to rise by 7.32% and reach $2,755.50 by July 4, 2025." CoinCodex predicts that by mid-July, we will see ETH recover and break through the $3,000 barrier.