Ethereum Price Hits $3,400, but Pro Traders Remain Cautious
The price of Ether (ETH) experienced a two-day correction of 4% after briefly hitting $3,400 on Wednesday, triggering the liquidation of $65 million in leveraged long ETH futures. Despite ETH hitting its highest level in two months, professional traders have maintained a neutral to bearish stance, according to derivatives markets.
ETH monthly futures traded at an annual premium (base rate) of 4% compared to spot markets on Friday. Values below 5% are considered pessimistic because sellers typically charge a premium to compensate for the longer settlement time. This lack of confidence can be partly explained by a strong downtrend in the broader cryptocurrency market, while gold and the S&P 500 index jumped to all-time highs in 2026.
Ether’s drop to $3,280 roughly corresponds to the 28% drop in the cryptocurrency’s total market cap since October 6, 2025. Lower interest in decentralized applications (DApps) has weighed on prices, especially after demand for memecoin launches and trading activity slowed. New market entrants are essential to boost blockchain activity, fees, and demand for native tokens.
Decline in Network Fees and DApp Demand
Ethereum base layer transactions increased by 28% in 30 days, but network fees fell by 31% compared to the standardized average. In comparison, competitors Solana and BNB Chain’s transactions remained relatively stable, while fees increased by an average of 20%. Even more worrying, Base, Ethereum’s largest scaling solution, saw a 26% decline in transactions over the same period.
Whales and market makers are very sensitive to overall network usage because Ethereum has a built-in mechanism that burns ETH during times of excessive demand for blockchain data processing. Lower network activity reduces ETH staking returns, giving investors less incentive to hold positions. Currently, 30% of the total ETH supply is still locked in staking.
Weak Momentum Due to Low Fees, DApp Demand, and Staking Risks
Whether Ether’s lack of bullish momentum simply reflects weaker DApp demand, traders are unlikely to regain confidence while institutional flows remain neutral. Ethereum spot exchange-traded funds (ETFs) in the United States have seen a modest net inflow of $123 million since January 7, while publicly traded companies that have purchased ETH remain largely underwater.
Bitmine Immersion’s (BMNR US) market cap was 13% lower than the $13.7 billion ETH value held in its corporate reserves. Likewise, Sharplink (SBET US) holds $2.84 billion worth of ETH, while the company’s total market cap was $2.05 billion. Even if these companies continue to purchase ETH at current levels, investor confidence in the cryptocurrency continues to wane.
ETH put (sell) options traded at a 6% premium to call (buy) instruments on Friday, a level considered the threshold of a neutral to bearish market. Professional Ether traders appear less comfortable maintaining downside price risks, suggesting they have low expectations of a bullish breakout to $4,100 in the near term.
The decline in network fees further reduces the likelihood of sustained bullish momentum. Ultimately, the ETH price appears to be heavily dependent on external factors rather than developments within the Ethereum ecosystem itself. The skepticism from professional traders reflects weak demand for DApps and concerns about possible outflows from the ETH native staking program.
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