Despite Bitcoin's resilience, Ethereum continues to trade below the $2,700 mark, even as the broader cryptocurrency market and other major altcoins show signs of recovery. Traders appear cautious due to various macroeconomic factors, including advancements in AI and shifts in international trade policies.
Data from providers like Cryptoeq indicates that the price performance of the largest altcoin remains subdued. However, recent shifts in trader sentiment suggest a potential reversal may be on the horizon.
Key On-Chain Metrics Show Mixed Signals
According to on-chain data from intelligence tracker Santiment, the number of Ethereum holders has been steadily increasing. As of a recent Tuesday, the count reached 138.98 million, marking an addition of nearly 500,000 new holders over the past week. This trend supports a bullish outlook for the altcoin.
The Network Realized Profit/Loss metric, which measures the net profit or loss of daily moved ETH, recorded significant negative values between January 30 and February 8. Such periods of traders selling ETH at a loss are often interpreted as signs of market capitulation. This behavior, where investors convert their ETH into stablecoins or other cryptocurrencies, can sometimes precede a price recovery.
In February 2025, large wallet investors, often referred to as whales (excluding exchange wallets), increased their Ethereum holdings by nearly 500,000 ETH tokens.
Data from derivatives traders also indicates a shift towards bullish sentiment. After several periods of negative funding rates, the aggregate funding rate across derivatives exchanges turned positive. The total open interest value for all outstanding Ethereum derivative contracts climbed to $8.03 billion, according to Santiment, suggesting that derivatives traders are anticipating a price rebound.
Whale Accumulation vs. Institutional Hesitation
Flow data for US spot exchange-traded funds (ETFs) from Farside Investors shows that Ethereum ETFs have not experienced significant inflows over the past four working days. On February 10, these ETFs even recorded an outflow of $22.5 million.
This indicates that while whales are accumulating ETH off exchanges, institutional interest in spot Ethereum ETFs has not shown comparable growth. This divergence presents a bearish case for the altcoin, suggesting that Ethereum might face a tougher battle for institutional adoption compared to Bitcoin.
However, data from Lookonchain shows a slight shift, with a net inflow of $514,000 as of Tuesday, February 11, hinting that institutional interest might be slowly changing.
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Experts Affirm Ethereum's Strong Value Proposition
Marcin Kazmierczak, COO and co-founder of blockchain startup RedStone, shared his perspective in an exclusive interview with Crypto.news:
"While ETH's price may fluctuate with broader market sentiment, its fundamental value proposition remains very strong. The network has evolved into a sophisticated financial ecosystem, processing over $30 billion in daily transactions through its Layer 2 networks like Arbitrum, Base, and zkSync. Short-term price volatility often overshadows the network's growing adoption rate—from institutional participation in liquid staking to scaling solutions handling millions of daily transactions. This robust infrastructure and proven utility suggest that Ethereum's long-term trajectory is more about ecosystem growth than temporary market reactions. Although a drop below $2,000 is possible, it would depend on broader crypto market volatility and the outcomes of current negotiations."
Staking Stabilizes as Institutional Focus Shifts
Data from The Block reveals that the percentage of ETH staked in Ethereum's staking contract has decreased to 27%, reverting to levels last seen in July 2024. This marks the first notable decline since the staking ratio peaked at 29% near the end of 2024.
Despite this drop, 33.5 million ETH remains staked, ensuring the continued security of the Ethereum network.
Even as institutional attention may pivot towards Layer 2 protocols or Bitcoin, Ethereum remains fundamental to the DeFi and NFT networks it supports. The growing opportunities to earn yield and airdrops across the ecosystem, particularly on Layer 2 chains, might be leading traders to adopt a more cautious approach towards staking Ether directly.
Consequently, the changing staking landscape presents both challenges and opportunities for the network. The dynamics between the staking rate, protocol dominance, and network security will likely influence future protocol development and the behavior of ETH holders.
Long-Term Outlook for Ethereum Remains Positive
Ruslan Lienkha, Market Director at YouHodler, offered a long-term view in an exclusive interview with Crypto.news:
"While Ethereum's short-term prospects may appear bearish, a broader perspective shows its price is approaching a strong long-term support level. This suggests that despite the current market weakness, institutional investors see an attractive entry point for long-term accumulation. Historically, such accumulation by institutional investors has often preceded market recoveries, as these players tend to build positions based on long-term fundamentals rather than short-term price fluctuations. Moreover, as other major cryptocurrencies have hit new all-time highs multiple times in recent months, ETH could be poised for a significant rally once market sentiment shifts."
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Frequently Asked Questions
What is causing Ethereum's price to struggle currently?
Ethereum's price is being influenced by broader market sentiment, including macroeconomic factors and a comparative lack of strong institutional inflows into its spot ETFs compared to Bitcoin. Short-term trader capitulation has also contributed to recent downward pressure.
How are Ethereum's on-chain metrics performing?
Key on-chain metrics present a mixed picture. The number of Ethereum holders is growing steadily, which is a positive sign for network adoption. However, the network realized profit/loss metric recently showed periods of significant negative value, indicating periods where many sellers were exiting at a loss.
What is the significance of whale accumulation?
When large investors (whales) accumulate ETH, it is often seen as a sign of long-term confidence in the asset's value. It can indicate that sophisticated players believe the current price is undervalued and anticipate future growth, which can be a bullish signal for the market.
How does staking affect Ethereum's network health?
Staking is crucial for securing the Ethereum network. A high amount of staked ETH contributes to network decentralization and security. While the recent slight decline in the staking percentage is noteworthy, a substantial amount of ETH remains staked, maintaining network integrity.
What is the long-term outlook for Ethereum according to experts?
Industry experts highlight Ethereum's strong fundamental value proposition, pointing to its vast and growing ecosystem of decentralized applications, Layer 2 scaling solutions, and role in DeFi and NFTs. They believe that long-term ecosystem growth is a more important indicator than short-term price volatility.
Could Ethereum's price drop below $2,000?
While a drop below $2,000 is possible depending on broader crypto market volatility, many analysts view current levels as being near strong long-term support. Such a drop would likely be seen as an attractive accumulation zone by institutional investors focused on long-term fundamentals.