Ethereum, the second-largest cryptocurrency by market capitalization, has been struggling to break above the $2,700 level, even as Bitcoin remains resilient and the broader crypto market sees a rebound. Traders seem unfazed by concerns surrounding China’s DeepSeek artificial intelligence advancements and U.S. President Donald Trump’s tariffs.
Ethereum Price Struggles Even as On-Chain Metrics Turn Bullish
Despite the price struggles, on-chain data from intelligence tracker Santiment reveals some bullish signs for Ethereum. The number of Ethereum holders has been steadily increasing, reaching 138.98 million, with nearly 500,000 new holders in the past week. Additionally, the Network realized profit/loss metric has shown large negative spikes, indicating that many traders are selling ETH at a loss, a potential sign of capitulation.
Whales Accumulate Ether While Institutions are Indecisive: Bull Case
Derivatives traders are starting to show a more bullish sentiment towards Ethereum, with funding rates turning positive and total open interest in Ether climbing to $8.03 billion. On the other hand, U.S. Spot Exchange Traded Fund flows indicate a lack of significant inflows to Ether ETFs, with $22.5 million in outflows recorded on February 10. While whales continue to accumulate Ether off exchanges, institutional interest in Spot Ether ETFs remains stagnant.
Experts Say Ethereum Value Proposition is Strong
According to Marcin Kazmierczak, Co-founder & COO of blockchain startup RedStone, Ethereum’s fundamental value proposition remains strong. The network has become a sophisticated financial ecosystem, processing over $30 billion in daily transactions across its Layer 2 networks like Arbitrum, Base, and zkSync. Despite short-term price fluctuations, Ethereum’s growing adoption and robust infrastructure suggest a positive long-term trajectory for the network.
Staked Ether Plateaus as Institutional Attention is Focused on Bitcoin: Bear Case
Data from The Block shows a decline in the percentage of ETH staked in Ethereum’s staking contract, dropping to 27%. This shift may be attributed to rising opportunities for earning yields and airdrops from Layer 2 chains, prompting traders to approach Ether staking more cautiously. While Ethereum remains critical to the DeFi and NFT network, institutional focus on Layer 2 protocols or Bitcoin presents challenges for the network’s staking dynamics.
Ethereum Long-Term Outlook is Bullish
Ruslan Lienkha, Chief of Markets at YouHodler, emphasizes that despite the short-term bearish outlook for Ethereum, there are strong indications of long-term support. Institutional investors are eyeing ETH as an attractive entry point for long-term accumulation, often preceding a market recovery. With other major cryptocurrencies hitting new all-time highs, Ethereum may be poised for a significant upward move once market sentiment shifts.
In conclusion, Ethereum’s future remains uncertain in the short term, but its long-term prospects seem promising. As the cryptocurrency market continues to evolve, Ethereum’s role in shaping the financial landscape and driving innovation remains undeniable. While challenges persist, the network’s resilience and adaptability suggest that Ethereum is well-positioned to weather the storms of market volatility and emerge stronger on the other side.
