FameEX Hot Topics | Ethereum Futures Data Shows Traders’ Fear, While On-Chain Data Signals Price Recovery

Ethereum has demonstrated resilience despite macroeconomic uncertainty, with both derivatives and on-chain activity supporting the potential for a price recovery. On Wednesday, after a sharp 15.1% drop over six days, Ethereum found support near $4,070, erasing $817 million in bullish leveraged positions. However, this pullback did not trigger a widespread bearish shift, indicating traders remain confident about Ethereum's prospects.

ETH derivatives reveal that traders are not overly concerned about further downside. Despite the decline, Ethereum's annualized futures premium remained above the neutral 5% threshold, signaling continued confidence. This steady premium suggests that traders are not pricing in significant additional losses. The hesitation to push Ethereum’s price higher stems partly from broader macroeconomic uncertainty, as US inflation remains above the Federal Reserve’s 2% target, and economic growth shows uneven signals. The Nasdaq Composite also fell, with concerns over overvaluation in artificial intelligence stocks adding pressure to the broader market.

Options data for Ethereum suggests a neutral stance, with balanced demand for both downside and upside protection. The current 4% reading indicates that traders are hedging equally between puts (sells) and calls (buys), reflecting uncertainty about Ethereum’s immediate future. Despite Ethereum briefly trading above $4,700, which normally would signal strong bullish sentiment, the market remains hesitant, unable to fully embrace the idea of a new all-time high just yet. This cautious outlook reflects broader market conditions, not necessarily Ethereum's underlying fundamentals.

On-chain activity, however, paints a more constructive picture for Ethereum. The network continues to outpace its competitors, holding around 60% of the total value locked (TVL) in decentralized finance (DeFi), according to DefiLlama. Ethereum's network fees also climbed to $11.2 million over the past week, a 38% increase from the prior week, indicating stronger demand for blockspace. 

While Ethereum derivatives still suggest caution, this is reflective of the broader crypto market correction rather than any intrinsic weakness in Ethereum itself. Traders are cautious due to global economic concerns, particularly the impact of US import tariffs on growth. Ethereum’s path to reclaiming the $4,700 level likely depends on a reduction in investor fear about the economy. Despite this, derivatives data suggest that professional traders remain composed, with no signs of panic even after Ethereum's retest of the $4,100 mark. This points to a recovery that appears to be supported by firmer foundations than initially assumed.

Disclaimer: The information provided in this section is for reference only and does not represent any investment advice or the official views of FameEX.