- Institutional accumulation via ETH ETFs and Bitmine Immersion is supporting a spot-driven price recovery above $2,300.
- Despite the rally, negative funding rates show traders remain skeptical, lacking confidence in sustained bullish momentum.
- Weak decentralized application (DApp) revenue and increased blockchain competition raise questions about Ethereum‘s long-term demand drivers.
- Bitmine Immersion‘s massive ETH holdings are currently trading 13% below their acquisition cost.
- Ether ETF assets under management have declined from $20.5 billion to $13.7 billion over the last three months.
Ether (ETH) prices surged above $2,300 this Wednesday, marking a significant recovery from late March lows near $1,940 and fueling a $25.4 billion increase in futures open interest. This move suggests a potential momentum shift for bulls after their repeated failures to reclaim the $2,400 level over ten weeks.
However, the ETH perpetual futures funding rate has consistently dipped below 0%, data shows excess demand for bearish leveraged positions. This metric indicates a clear lack of confidence among traders, despite the price rally.
Consequently, the recent rally appears to be sustained primarily by spot market demand. US-listed Ether spot ETFs have accumulated $248 million in net inflows over the past ten days, according to reports, while Bitmine Immersion announced a $312 million ETH acquisition.
Meanwhile, institutional holdings face notable paper losses; Bitmine’s 4.87 million ETH are trading 13% below cost, and ETF assets under management have fallen sharply. This institutional caution coincides with a broader decline in Ethereum network utility.
Specifically, Ethereum’s weekly DApps revenue has plummeted to $11 million, down from $24 million in early February. This weak on-chain activity stems from a bear market impacting nearly every sector, while new competing blockchains like Hyperliquid and Plasma emerge.
Meanwhile, Iran-war/” href=”https://cointelegraph-magazine.com/anger-grows-polymarket-bets-iran-war/” target=”_blank” rel=”nofollow noopener”>prediction markets provide a rare bright spot but fail to boost overall network demand. Investors now question if ETH can capture future DApp growth given this increased competition and declining revenue.
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