Ether has spent the past week trading within a narrow range, moving less than 4% as traders question whether the $2,900 support level can hold.
Repeated failures to push decisively above $3,000 have coincided with falling Ethereum network fees and subdued demand for Ether exchange-traded funds.
Together, these factors have contributed to a lack of conviction across both spot and derivatives markets.
Traders are increasingly reassessing whether a sustainable recovery is achievable in the near term.
Weak demand in derivatives markets
Signals from ETH derivatives markets suggest limited appetite for bullish leveraged positions.
Two-month Ether futures recently traded at an annualized premium of around 3% compared with spot prices.
Under neutral market conditions, that premium typically exceeds 5% to compensate for the longer settlement period.
The fact that it has remained below that level for several weeks points to restrained optimism among professional traders.
This cautious positioning reflects broader uncertainty surrounding Ether’s short-term price direction.
Falling fees despite rising activity
Part of the muted sentiment can be traced to declining Ethereum network fees.
Over a recent seven-day period, network fees fell by roughly 26% even as transaction counts increased by about 10%.
At first glance, this suggests that activity on the Ethereum blockchain remains healthy.
However, Ether’s valuation depends heavily on demand for block space and processing, not just raw transaction volume.
Competing blockchains focused on decentralized applications have maintained steadier fee generation, raising questions about why Ethereum has lagged.
DApp usage remains flat
A closer look at decentralized application activity shows limited growth in fee generation.
Ethereum DApps have produced relatively flat fee revenue over the past four weeks.
That level remains well below the $140 million peak recorded in October.
The data points to stagnation rather than collapse, but it offers little support for a strong bullish narrative.
Without a clear pickup in DApp usage, traders appear reluctant to chase higher prices.
ETF outflows weigh on sentiment
Institutional demand has also shown signs of cooling.
Ether ETFs have recorded daily net outflows totaling around $307 million since mid-December.
While this represents less than 3% of total assets under management, the persistent selling has dampened sentiment.
BlackRock’s iShares Ethereum Trust ETF remains the largest in the group, holding more than $10 billion in assets.
Still, even modest outflows can influence market psychology during periods of price consolidation.
Macro risks add pressure
Ether’s underperformance is also difficult to separate from broader macroeconomic concerns.
Tighter fiscal conditions and limited scope for interest rate cuts have increased fears of a global slowdown.
In such an environment, investors tend to reduce exposure to risk assets, including cryptocurrencies.
While weak leveraged demand and ETF outflows are not necessarily fatal, a durable rally likely requires stronger network activity and renewed demand for Ethereum-based applications.
