Key takeaways:
- •Ethereum’s $100 billion TVL leadership contrasts with falling activity, as competitors gain traction through lower fees.
- •Institutional accumulation via spot ETFs and corporate reserves may trigger an Ether supply shock above $5,000.
Ether (ETH) rose 14 % over the past seven days, climbing above $4,500 for the first time in two weeks. Still, derivatives indicators continue to show skepticism, leaving traders to wonder what is weighing on sentiment and whether ETH can push past $5,000 in the near term.
ETH monthly futures are trading at a 7 % premium over spot markets, comfortably within the 5 % to 10 % neutral range that compensates for longer settlement periods. Notably, this gauge has not turned bullish since February. Even the 100 % rally in ETH during the six weeks leading up to Aug. 13 was not enough to spark confidence.
Increased competition in DEX activity reduced Ether’s appeal
Some analysts attribute Ether traders’ unease to growing competition, particularly following the launch of the Official Trump (TRUMP) memecoin on Solana. With smoother onboarding for new users and wallets linked directly to decentralized exchanges, Solana, BNB Chain, and Tron have gained traction, while Ethereum has lagged in both fees and active addresses.
The rapid growth of synthetic perpetual futures trading, led by Hyperliquid, has raised concerns among Ether holders. Instead of relying on a layer‑2 scaling solution, the project introduced its own HyperEVM blockchain. The trend gained momentum after the decentralized exchange Aster, backed by YZi Labs (formerly Binance Labs), announced plans to launch its own chain.
Ethereum still dominates in total value locked (TVL), with nearly $100 billion secured, according to DefiLlama. Yet network activity shows little improvement, a factor likely explaining why Ether derivatives remain subdued. Adding pressure, fees on several Ethereum rivals have doubled in the past 30 days, eroding ETH’s relative appeal.
Ethereum’s network fees dropped 30 % over the past month, while transactions declined 10 %, according to Nansen. By contrast, fees on BNB Chain, Avalanche and HyperEVM doubled, and transaction counts surged by 60 % or more over the same period. Even though deposits in Ethereum smart contracts rose 5 % during the month, traders worry that competitors are steadily closing the gap.
Among the positive standouts in Ethereum’s TVL growth, the synthetic stablecoin protocol Ethena gained 18 % over the past 30 days, while Spark—a DeFi platform focused on lending and stablecoin yields—saw deposits rise 28 %. On the downside, TVL on the Pendle yield platform dropped 50 %, and deposits on the lending platform Morpho declined 8 %.
The Ether options delta skew has remained within a neutral band of +6 % to –6 %, indicating that put (sell) and call (buy) options are trading at comparable levels. Had traders grown more optimistic, demand for bullish strategies would have pushed the indicator lower, but such a shift has yet to occur.
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ETH traders may be uneasy about the potential approval of spot exchange‑traded funds (ETFs) for altcoins by the US Securities and Exchange Commission. Analysts see approval odds above 95 % for Solana, Litecoin and XRP in October, an outcome that could strengthen those networks and heighten competition across the altcoin market.
Ether’s next leg higher will likely hinge on sustained accumulation by institutional investors through spot ETFs, as well as companies adopting ETH as a reserve asset. Bitmine Immersion Tech (BMNR) alone has added nearly $12 billion in Ether by issuing debt and selling stock, an activity that could spark a supply shock and propel prices beyond $5,000.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.