Cryptocurrencies have become increasingly popular over the last few years, with an ever-growing number of investors seeking to add them to their portfolios. However, buying, selling, and trading at the right times in the crypto community can be quite challenging as a result of the fluctuations and volatility that see the prices changing significantly in as little as twenty-four hours. Making the most of these changes is tricky and takes experience, meaning that most users make mistakes in the beginning until they get the hang of things and understand how the market works. The better-known coins are the safer bet, which is why you’re more likely to see people investing in Ethereum, Bitcoin, or Solana instead of less popular altcoins.
And while these coins are known as being more stable and able to maintain their value over the long term, there are some situations in which that doesn’t seem to be the case. At the moment, ETH is navigating an episode like that, as it seems that price recovery continues to remain elusive in the ecosystem.
ETFs
Prior to their introduction, exchange-traded funds were hailed as a breakthrough in the crypto ecosystem, one that was going to give prices an incredible boost by driving more engagement and helping the marketplace become more mature and stable. While the effects were immediate in the aftermath of the official launch, the gains were ultimately removed by price corrections. Ultimately, ETFs didn’t perform as well as expected, at least not in the Ethereum marketplace. As of 2025, the Spot Ethereum ETFs continue to become weaker, with over $3.3 million in net outflows as of April.
There were $94.1 million in outflows during the span of only two weeks against $13 million in inflows, a considerable difference that could explain why the market remains sluggish. The fact that investor interest remains low is both intriguing and concerning, particularly given the fact that institutional demand was one of the key reasons why ETH gained so much in May 2024. At that point, investors were betting on a swift approval by the Securities and Exchange Commission. However, it turns out that this wasn’t the only thing they had to take into account.
It’s not just the exchange-traded funds that have been suffering, but all other products associated with Ethereum as well. Data shows that the flows into ETH-based investment funds have become considerably more bearish.
Open Interest
The concept of open interest refers to the number of outstanding derivative contracts for any type of asset as long as they haven’t been settled. In the crypto world, this metric refers to all the positions related to BTC that have opened on all derivatives exchanges. When this figure rises, investors take it as an indication that fresh positions are opening up on the market. In addition to the low open interest recorded by Ethereum at the moment, there is also the issue of negative funding rates.
The low OI indicates that trader participation has been reduced and that speculative activities have also decreased substantially. Trader participation is clearly quite low, and the open interest metric is currently nearly 50% below the peak it recorded in January. Analysts believe that this is also an indicator that investor confidence is not doing very well. In the long term, this could exacerbate the decline since buying pressure shows no signs of picking up speed.
Ethereum’s perpetual futures marketplace sees negative funding rates hovering below 0%, a clear sign of an overwhelmingly bearish sentiment that has the ecosystem in a tight grip. This sentiment is unquestionably the dominant one in the Ethereum market at the moment, and there’s no saying when the next switch will be.
Layer-1
Ethereum is one of the pioneers of decentralized finance, being the network that came up with concepts such as non-fungible tokens. It has long built a reputation for itself as something more than a place where coins can be bought or sold. It is a community focused on the tech developments associated with cryptocurrencies and blockchains, a platform that is looking to foster growth in these areas. Over the years, the ecosystem changed and developed quite significantly as a result of the frequent upgrades it undergoes. Its high gas fees and need for scalability have been among the chief reasons why updates were repeatedly introduced over the last few years.
However, the problems have largely persisted. Right now, experts think that the enduring issues pertaining to the high gas fees have given competitors that are solely layer-1 based the chance to enter its market share and take some of Ethereum’s users for themselves. It is true that some of the activities have also migrated to layer-2 solutions, but there are also many developers and traders who simply prefer layer-1 solutions. As such, many have already moved to Solana, BNB Chain, or Avalanche. Network activity has been plummeting on Ethereum as a result.
The number of active wallets declined by roughly 33% in the span of a single month.
The Future
Due to the fluctuations and volatility, the crypto market is particularly concerned with future predictions and price estimations. There’s no denying the fact that these figures can never be 100% accurate because the marketplace is constantly in flow. However, most investors feel safer and more secure in their choices when they make decisions based on technical analysis. It’s not entirely accurate, but the likelihood of being correct is much higher than if you were not performing transactions based on rough estimations.
It can be good to buy and accumulate tokens during the bear market since the price is more affordable. This is part of the age-old mantra of buying low and selling high, the easiest way to make a profit. However, make sure to have a look at the figures as well, and don’t rush to buy a lot all at once since the price could fall even further in the future.
Being an investor isn’t easy, and dealing with cryptocurrencies is even more complex. To ensure your success, the game plan you choose should be tailored to your needs and financial goals.