Ethereum recently touched the $3,400 mark this week. However, persistent bearish positioning among professional traders and weakening network fundamentals triggered a 4% pullback, resulting in the liquidation of $65 million in leveraged long positions. Derivatives data currently signals low expectations for a near-term breakout to $4,100.
Professional Traders Maintain Bearish Stance
ETH monthly futures traded at a 4% annualized premium relative to spot markets on Friday. Premiums below 5% are generally considered indicative of bearish sentiment.
The recent price retreat to $3,280 coincided with a 28% decline in the total cryptocurrency market capitalization since October 6, 2025.
While Ethereum's base layer transactions saw a 28% increase over the past 30 days, network fees fell by 31% compared to the standardized average. In contrast, competitors such as Solana and BNB Chain experienced stable transaction volumes with an average fee increase of 20%. Base, which is Ethereum's largest scaling solution, recorded a 26% decrease in transactions during the same period.
U.S. spot Ether exchange-traded funds have registered a net inflow of only $123 million since January 7. On Friday, put options traded at a 6% premium relative to calls on Deribit, indicating neutral-to-bearish territory.
Impact on Staking Yields
A decrease in network activity directly impacts ETH staking returns. Ethereum burns tokens during periods of high demand for blockchain processing, and lower activity reduces this deflationary pressure. Currently, 30% of the total Ethereum supply remains locked in staking.
Publicly listed companies holding ETH are currently trading below the value of their ether reserves. Bitmine Immersion, for instance, has a market capitalization that is 13% below the $13.7 billion worth of ETH held in its corporate reserves. Sharplink holds $2.84 billion in ETH, but the company's market capitalization totals only $2.05 billion.
This cautious market sentiment suggests that professional traders are hesitant to take on significant downside exposure, pointing towards subdued expectations for an immediate surge to $4,100.