Ethereum (ETH) has recently gained momentum, surging 56.5% over the last 30 days. However, despite this impressive price increase, traders are expressing skepticism about the possibility of the cryptocurrency breaking the $4,000 psychological barrier. Derivatives data reveals a cautious sentiment among ETH traders, reflecting ongoing anxiety regarding Ethereum’s price action.
Since March 2024, ETH has struggled to surpass the $4,000 threshold, which has become a significant point of frustration for investors. Recently, the annualized funding rate for ETH perpetual futures dipped to 9%, indicating weakened demand for leveraged bullish positions. This is in stark contrast to the previous week’s funding rate of 19%, which showcased a more optimistic outlook. Interestingly, this latest funding rate aligns with levels seen back in July when ETH was trading around $2,600, despite the cryptocurrency’s notable gains since then.
Adding to traders’ disappointment is an 11% drop in Ethereum’s total value locked (TVL), which fell to a five-month low of 23.4 million ETH from 26.4 million ETH just a month ago. This decline in network deposits plays a significant role in the overall market dynamics as lower TVL implies diminished confidence and utility within the Ethereum ecosystem.
Moreover, Ethereum has lost its leading position in decentralized exchange (DEX) volume. In the last 30 days, it recorded $81.4 billion in activity, trailing behind Solana’s $82.9 billion and significantly behind BNB Chain’s remarkable $189.2 billion. Network activity is crucial as transaction fees play a vital role in incentivizing validators and encouraging the development of decentralized applications (DApps).
As ETH traders navigate this challenging landscape, the question remains: can Ethereum break the $4K barrier, or will the competitive pressure from Solana and BNB Chain continue to weigh heavily on its performance? As the crypto market evolves, staying informed is key for traders looking to make sense of these fluctuating dynamics.
