ETH derivatives data shows weak momentum

• ETH derivatives show weak momentum despite strong ETF inflows.
• Ethereum’s network activity and TVL continue to decline.
• Technical analysis hints at long-term upside, but traders stay cautious.

Ethereum (ETH) has seen a strong price surge in recent weeks, gaining more than 54% over the past month and trading at around $3,755 at press time.

However, despite this rally and strong spot ETF inflows, derivatives market data paints a very different picture, casting doubt on whether Ethereum can break through the psychologically significant $4,000 level any time soon.

In essence, the disconnect between bullish institutional inflows and weak derivatives metrics raises several questions for market participants.

Is Ethereum’s recent rally sustainable, or is it merely a reflection of speculative optimism driven by ETF hype?

Furthermore, are investors losing confidence in Ethereum’s network fundamentals amid rising competition from rival blockchains?

Derivatives market tells a cautious tale

While Ethereum’s spot market has been energised by inflows into exchange-traded funds, futures data shows traders are hesitant to commit to leveraged bullish positions.

As of Thursday, the annualised funding rate for ETH perpetual futures had fallen back to 9%, down from 19% earlier in the week, with the ETH OI-weighted funding rate dropping to 0.0043% from 0.0163% on July 21.

This suggests waning demand for long positions, even after a near 46% gain in ETH price since early July.

This behaviour is unusual. Historically, rising prices coincide with stronger futures premiums, yet the current trend indicates hesitation.

The 3-month ETH futures premium has also softened slightly to 6%, down from 8% just days ago.

While this still sits within a neutral range, it reveals a reluctance among whales and market makers to bet aggressively on further price appreciation in the near term.

Ethereum network weakness frustrates investors

The cautious tone in derivatives is likely being fueled by stagnant on-chain activity.

Ethereum’s total value locked (TVL) dropped to a five-month low of 23.4 million ETH, falling 11% in just 30 days.

That sharp decline comes despite ETH’s rising dollar value and highlights a significant reduction in the volume of assets being deployed within the ecosystem.

In contrast, Solana’s TVL only fell 4% during the same period, while BNB Chain’s TVL rose 15% in native token terms.

These shifts show that competing platforms are either maintaining or growing their utility at a time when Ethereum’s activity appears to be plateauing.

Even more concerning is Ethereum’s decline in dominance among decentralised exchange (DEX) volumes.

According to DefiLlama, Ethereum recorded $81.32 billion in DEX activity over the past month.

Solana surpassed that with $82.9 billion, while BNB Chain led with a staggering $189.2 billion.

These figures highlight that Ethereum is no longer the go-to platform for certain core DeFi activities.

Technical analysis signals a mixed ETH price outlook

Despite lukewarm derivative activity, technical analysts remain divided on Ethereum’s future trajectory.

Popular investor Ivan On Tech has pointed to a symmetrical triangle pattern that could lead to a breakout toward $7,709, more than double the current price.

ETHEREUM BREAKING OUT ON THE MONTHLY!!!!!!!!!!!!

TARGET $7,700
YES
OOOH YES GUYS pic.twitter.com/z0sZvKxOYW

— Ivan on Tech 🍳📈💰 (@IvanOnTech) July 20, 2025

Meanwhile, another analyst, Mikycrypto Bull, has identified a long-term ascending triangle formation dating back five years, which could theoretically launch ETH as high as $16,700.

ETHEREUM IS SET FOR A MACRO BREAKOUT

IT WILL SPARK OFF A HUGE ALTSZN IF IT HAPPENS

A VERY CRITICAL MOMENT FOR ETHEREUM pic.twitter.com/IoZX77DvmR

— Mikybull 🐂Crypto (@MikybullCrypto) July 30, 2025

Adding to the bullish sentiment is a recent MACD crossover on the monthly chart, a signal that has preceded major rallies in previous cycles.

However, while long-term technicals hint at explosive potential, short-term forecasts are more cautious.

ETH must first break through $4,100 and hold above $3,700 to sustain its upward momentum.

Corporate confidence grows amid market doubts

Institutional and corporate adoption of Ethereum continues to grow.

Firms such as SharpLink Gaming and World Liberty Financial have accumulated substantial ETH reserves in recent months.

SharpLink now holds over 438,000 ETH and actively stakes its assets to generate passive income.

World Liberty Financial has acquired over 77,000 ETH, with recent purchases near $3,294 per coin.

These moves suggest that some institutions are positioning Ethereum as a long-term strategic asset.

Their investments reflect confidence in Ethereum’s evolving role as foundational infrastructure for decentralised applications and finance.