Ethereum derivative products lack momentum, raising doubts about the bullish $4,000 rally.

In the past 30 days, the price of Ether has risen to the sky by 56.5%, however, derivative indicators show that traders remain cautious.

This caution reflects the concerns of investors as Ether has repeatedly failed to conquer the psychological milestone of $4,000 since March 2024. At the same time, the prolonged weak on-chain indicators further exacerbate the disappointment.

The annual funding rate of the perpetual futures contract for ETH | Source: Laevitas.chThe annual funding rate of the perpetual futures contract for Ether has decreased to 9% on Thursday, indicating that demand for leveraged long positions is weakening. Previously, this rate reached 19% from Friday to Monday, reflecting moderate optimism. Currently, the funding rate has returned to the level of July 7 – when ETH was only trading around $2,600 – despite the price having risen by up to 46% since then, indicating a paradox in the market.

TVL declines, investors disappointed

One of the factors that makes the market sentiment less positive is the 11% decrease in the amount of deposits into the Ethereum network. The total value locked (TVL) has dropped to 23.4 million ETH – the lowest level in 5 months, compared to 26.4 million ETH a month ago.

Meanwhile, the TVL of Solana only decreased by 4% (according to SOL), while BNB Chain grew by 15% (according to BNB), indicating that Ethereum is gradually losing its advantage compared to its competitors.

Ethereum also lost its leading position in trading volume on DEX exchanges, with only $81.4 billion in 30 days, lower than Solana's $82.9 billion and far behind BNB Chain's $189.2 billion, according to data from DefiLlama.

DEX volume market share | Source: DefiLlamaNetwork activity plays a key role, as it is the source of transaction fee revenue – a necessary factor to reward validators and attract decentralized applications (dApp) developing on the ecosystem.

Therefore, even though Ethereum still maintains an advantage in total TVL and the number of developers, these advantages may gradually lose significance if network activity continues to weaken compared to competitors.

Futures and ETFs: Mixed Signals

The analysis of the monthly futures market shows that the annual premium is currently at 6%, down from 8% on Tuesday – remaining in a neutral zone for the past three weeks. This is a sign that professional investors are not yet truly confident in the continued rise.

Annual premium for 3-month ETH futures contracts | Source: Laevitas.chIt is noteworthy that the decline in demand for bullish leverage occurs alongside a continuous flow of money into ETH spot ETF funds for nearly three weeks.

The cautious mentality around the $3,800 mark may stem from concerns that competitors like Solana and BNB Chain have more user-friendly platforms and superior transaction processing capabilities.

In addition, the market is monitoring the long-term impact of the amount of ETH accumulated by listed companies – a factor that has contributed to the recent price surge. According to data from Strategicreserve.xyz, there are at least 9 businesses such as Bitmine Immersion Tech (BMNR), SharpLink Gaming (SBET), and The Ether Machine (DYNX) holding over 2,000 ETH.

If this accumulation trend continues, ETH could aim for the $5,000 mark. However, at this moment, investors still maintain a skeptical attitude, not truly believing that the $4,000 threshold is within reach.

Mr. Giáo