ETH Derivatives and Onchain Data Suggest the Path to $2,600 Remains Open

Key takeaways:

• ETH derivatives metrics show professional traders are holding steady and haven’t flipped bearish despite recent DeFi exploits.
• Ethereum’s 53% Total Value Locked market share and institutional ETF demand continue to provide support near $2,200.

Ether price rally stalls, but ETH futures far from bearish

Ether (ETH) price failed to sustain bullish momentum after peaking near $2,380 on Sunday. Repeated failures to break the $2,400 mark over the past four weeks have gradually drained confidence, suggesting professional ETH traders might be jumping ship despite several derivatives and onchain metrics supporting further upside.

ETH perpetual futures annualized funding rate. Source: Laevitas

The ETH perpetual futures annualized funding rate stood at 5% on Tuesday, slightly below the neutral 6% to 12% range. While not particularly enthusiastic, the metric has distanced itself from the bear-controlled negative funding rates seen last week.

ETH options put-to-call ratio at Deribit, USD. Source: Laevitas

ETH options put (sell) volumes have stayed lower than equivalent call (buy) options at Deribit since May 4. Demand for neutral-to-bearish strategies has been declining for three weeks, so ETH whales and market makers aren’t flipping bearish just yet.

Still, the lack of bullishness in ETH futures could be explained by external factors like high oil prices and inflation fears. The US Consumer Price Index jumped to 3.8% in April, the highest in over three years, due to rising energy costs.

The Bureau of Labor Statistics report also contained bad news for workers, as real average hourly wages dropped 0.5% from the prior month.

DeFi hacks and Ethereum Foundation sales weigh on investor sentiment

Besides worsening macroeconomic conditions, the Ethereum ecosystem has faced internal struggles, including several hacks of decentralized finance (DeFi) protocols. The Kelp DAO rsETH bridge was exploited via LayerZero message spoofing, draining over $290 million from multiple lenders using fake collateral, including market leader Aave.

More recently, the Ekubo protocol lost $1.4 million through EVM v2 swap vulnerabilities, while TrustedVolumes saw a $6.7 million loss due to a protocol logic flaw. These incidents stem from protocol-specific bugs and access control errors rather than flaws in Ethereum itself, EVM security, or layer-2 bridge designs.

Recent ETH sales by the Ethereum Foundation and the subsequent unstaking of $50 million have created discomfort among investors. Sentiment took another hit after an Ethereum ICO participant moved 10,000 ETH to a new wallet. Regardless of the reasoning behind these moves, fear and uncertainty remain elevated as ETH trades 54% below its all-time high.

Related: North Korea ‘industrialized’ crypto theft, laundered billions–CertiK

Blockchain Total Value Locked market share. Source: DefiLlama

Ether’s strength lies in Ethereum’s 53% Total Value Locked (TVL) market share and its lead in decentralized application (DApp) activity when including its layer-2 ecosystem. No competitor matches its institutional appeal, which is clear from the $11.6 billion in Ethereum spot exchange-traded fund (ETF) assets under management.

Ultimately, the lack of bullish leverage demand in ETH futures should not be seen as fading interest from pro traders, so the path toward $2,600 and higher remains open.