Ether Remains at $2K, But Does $242 Million ETH ETF Outflow Signal More Downturn?
Ether is currently trading at $2,000, facing potential pressure from corporate earnings, U.S. government debt, and escalating global tensions.
Key Insights:
- Institutional interest in Ether is cooling as investors gravitate towards safer short-term U.S. government bonds.
- Elevated interest rates and a surge in ETH supply are making current staking yields less appealing for long-term holders.
Ether (ETH) has struggled to maintain values above $2,150 since February 5, causing fears of further corrections. Sentiment among investors deteriorated following outflows from Ether exchange-traded funds (ETFs) and increased appetite for put options.
US-listed Ether ETFs daily net flows, USD million. Source: Farside Investors
Between Wednesday and Thursday, U.S.-listed Ether ETFs experienced a net outflow of $242 million, reversing a prior trend. The institutional demand that emerged with a 20% Ether price recovery post a February 6 low of $1,744 has waned as investors noted inconsistent U.S. economic growth, highlighted by a growing need for short-term U.S. government bonds.
US 2-year Treasury yield. Source: TradingView
On Friday, U.S. 2-year Treasury yields dropped to 3.42%, nearing the lowest rates since August 2022. The increasing interest in government-backed debt reflects market expectations of further interest rate reductions by the U.S. Federal Reserve throughout 2026. Signs of economic stagnation lessen inflation risks, paving the way for expansionist measures.
Despite macroeconomic trends, Ether has lagged behind the wider cryptocurrency market, prompting traders to question Ethereum’s competitiveness against networks with greater scalability and quicker on-chain activity.
Traders are wary that ETH prices might see further declines; however, data appears to indicate recent price weakness rather than an impending crash.
ETH/USD (orange) vs. total crypto capitalization (blue). Source: TradingView
In the last 30 days, the Ether price has dropped 38%, negatively impacting network transaction fees and ultimately reducing staking incentives. Holding ETH for the long term is vital for sustainable price appreciation, but the current 2.9% staking yield falls far below the U.S. Federal Reserve’s target rate of 3.5%. Moreover, the ETH supply is growing at an annualized rate of 0.8%.
ETH derivatives metrics illustrate traders’ anxiety over potential price declines
Professional traders are uncomfortable maintaining downside exposure, as evidenced by ETH derivatives metrics, further underscoring a bearish outlook.
ETH 30-day options delta skew (put-call) at Deribit. Source: Laevitas.ch
By Friday, the ETH options delta skew was at 10%, indicating that put options were trading at a premium. The heightened interest in neutral-to-bearish strategies pushed this indicator above a 6% threshold, a level that has been typical for the last two weeks. The mood among traders reflects a six-month-long bear market, with ETH trading at 58% below its all-time high.
Related: Crypto investor sentiment will rise once the CLARITY Act is passed–Bessent
From a broader perspective, the $242 million outflows from Ether ETFs account for less than 2% of the total $12.7 billion in assets under management, suggesting that traders shouldn’t assume ETH has entered a terminal decline. Investor sentiment is likely to recover as Ethereum continues to dominate Total Value Locked (TVL).
Traders will continue focusing on corporate earnings reports and the U.S government’s ability to refinance its debt amidst increasing global socio-economic tensions. Under these conditions, ETH prices are expected to stay pressured despite onchain and derivatives metrics.
