Ethereum touched $3,400 this week before professional traders' persistent bearish positioning and weakening network fundamentals triggered a 4% pullback that wiped out $65 million in leveraged long positions. With derivatives data signaling low expectations for a near-term breakout to $4,100.
What Happened: Pro Traders Stay Bearish
ETH monthly futures traded at a 4% annualized premium relative to spot markets on Friday. Levels below 5% are considered bearish.
The price retreat to $3,280 tracked a 28% decline in total cryptocurrency market capitalization since Oct. 6, 2025.
Ethereum base layer transactions grew 28% over the past 30 days, but network fees fell 31% versus the standardized average.
Competitors Solana and BNB Chain saw stable transaction volumes with fees rising 20% on average. Base, Ethereum's largest scaling solution, recorded a 26% decline in transactions over the same period.
U.S. spot Ether exchange-traded funds recorded a net inflow of just $123 million since Jan. 7. Put options traded at a 6% premium relative to calls on Friday at Deribit, marking neutral-to-bearish territory.
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Why It Matters: Staking Yields Under Pressure
Lower network activity directly reduces ETH staking returns because Ethereum burns tokens during periods of high demand for blockchain processing. Currently, 30% of the total supply remains locked in staking.
Publicly listed companies holding ETH remain underwater.
Bitmine Immersion has a market capitalization 13% below the $13.7 billion worth of ETH in its corporate reserves.
Sharplink holds $2.84 billion in ETH while the company's market cap totaled $2.05 billion. Professional traders appear hesitant to take on downside exposure, signaling low expectations for a near-term breakout to $4,100.
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