Ethereum surged 9% from a low of $3,355 on Sunday to $3,682. However, derivative indicators still show that traders do not truly trust the ability to sustain this upward trend.
The recent price movement of Ether has almost synchronized with the entire altcoin market capitalization, reflecting a clear lack of momentum to trigger a sustainable breakout above $3,800 in the short term.
On July 28, the market capitalization of altcoins reached $1.3 trillion - coinciding with Ether reaching its highest peak in 2025. However, the inability of ETH to maintain the $4,000 threshold by the end of the month is attributed to the increasing cautious sentiment within the investment community, rather than internal instabilities of the Ethereum ecosystem. Nevertheless, this does not mean that confidence in ETH's bullish trend is being reinforced.
Currently, the price difference of the 3-month futures contract with Ether is only at 5% - the threshold that distinguishes between a neutral market and a negative trend. Notably, even when ETH surged to $3,900 a week ago, this indicator still could not shift to a clear bullish signal.
Ethereum's TVL Decline Affects Investor Sentiment
One of the reasons for the current disappointment is due to the weakening cash flow into decentralized applications (DApps). Over the past 30 days, TVL on the Ethereum network has decreased by 9%, down to 23.8 million ETH.
In contrast to the decline of Ethereum, BNB Chain recorded an impressive increase of 8%, raising TVL to 6.94 billion BNB. Meanwhile, the Solana ecosystem also showed signs of recovery as deposits into DApps increased by 4%, reaching 69.2 million SOL, according to data from DefiLlama. However, in USD terms, Ethereum still maintains its dominant position with a 59% market share of total TVL across the market.
However, investor sentiment towards Ether is gradually shifting towards more caution, clearly reflected in the ETH options market. On Saturday, the 25% delta skew (put-call) index reached 6% - the threshold that distinguishes between a neutral trend and a bearish trend.
This index rises when the demand for put options increases. Although it has fallen to 3%, indicating that sentiment is temporarily balanced, it also means that optimistic confidence has not yet truly returned.
Ethereum Lacks Demand From Institutions To Exceed $3,800
Currently, the ETH price on exchanges like Coinbase and Kraken is slightly lower than on Binance and Bitfinex - a signal indicating that demand from institutional investors has weakened. This is in stark contrast to the period from July 10 to 23, when higher prices on these exchanges were seen as accumulation activities by investment funds.
The cooling signal from institutions is further evident as Ether spot ETF funds experienced net outflows of up to $129 million in just three days, from Wednesday to Friday last week. In the absence of strong driving forces, Ether is unlikely to break free from the sideways trend of the overall market to conquer the $3,800 threshold.
The outlook for a strong bullish rally is currently quite dim, especially as global macroeconomic factors such as the risk of a trade war or uncertainty surrounding the US labor market continue to cast a shadow. Investors are becoming increasingly cautious in light of official data, fearing that economic growth and inflation are being inflated by a wave of inventory accumulation from businesses and consumers, before the prospect of the US potentially increasing import taxes.
In this context, if institutional capital does not return soon, ETH is likely to continue following the overall movement of the altcoin market - lacking breakthroughs and easily influenced by macro variables.