ETH derivatives data show caution, but rising institutional reserves reinforce ETH’s long-term bullish case.
Ether (ETH) has held firm around the $4,300 level despite a 15% decline from the Aug. 24 all-time high. The pullback came amid a broader cryptocurrency market correction, likely reflecting worsening macroeconomic conditions. While derivatives metrics show little optimism, several key onchain indicators suggest ETH could break above $5,000 in the near term.
Negative remarks from US President Donald Trump about the commercial relationship with India added investors choice to cut. Trump’s comments came after Indian Prime Minister Narendra Modi met with Chinese and Russian leaders on Monday. The tech-heavy Nasdaq dropped 1.3%, while gold reached an all-time high, supported by continued foreign central bank demand.
Ethereum’s network activity also showed notable strength. A 30% weekly surge in fees allowed Ethereum to overtake Tron as the highest-grossing network. Including layer-2 activity, Ethereum’s total fees reached $16.3 million, more than double Solana’s $7.9 million. According to DefiLlama, Ethereum posted its second-highest decentralized application (DApp) fees since February 2022.
In August, Ethereum DApps generated $466 million in fees, a 36% increase from the previous month. In contrast, Solana DApp fees fell 10% over the same period, while BNB Chain saw a 57% contraction. Among Ethereum’s top contributors were Lido with $91.7 million, Uniswap with $91.2 million, and Aave with $82.9 million in 30-day fees.
While onchain activity shows progress, Ether derivatives suggest traders remain skeptical about ETH reclaiming $5,000 in the short term.
The monthly futures premium stands at 5%, hovering at the edge of a neutral-to-bearish market. Such caution is expected after a 15% pullback from the Aug. 24 all-time high. Yet, futures aggregate open interest has risen 26% in 30 days, reaching $58.5 billion, signaling that traders are not abandoning the asset.
Ether options skew measured 3% on Monday, well within the -6% to +6% neutral band, as traders assigned similar probabilities to surprise moves in either direction. A sharp rise above the neutral threshold would have suggested expectations of a breakdown below $4,200, but that has not materialized.
Institutional adoption also continues to build. Corporations have added 2 million ETH to reserves over the past 30 days, according to data from StrategicETHReserve.xyz. Firms including Bitmine Immersion Tech (BMNR), SharpLink Gaming (SBET) and The Ether Machine (ETHM) now hold a combined 4.71 million ETH, valued at more than $20.2 billion.
More significantly, some of these companies are beginning to deploy capital into Ethereum-based DApps. ETHZilla (ETHZ) announced new commitments on Tuesday, underscoring the growing activity across the ecosystem. This expansion of real-world usage strengthens ETH’s role within decentralized applications and could further differentiate Ethereum from competitors.
Ultimately, despite cautious signals from derivatives markets, Ethereum’s rising network activity leaves ETH well-positioned to regain bullish momentum.
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.
