Ethereum, the second largest cryptocurrency by market capitalization, continued to show disappointing performance as it traded around the $2,000 level.
This was the first time since the asset last traded within this range – between March 9 and May 8, 2025, a 60-day period – that the price revisited this zone. This revision seems linked to the attenuated structure of the market as a whole and its lack of conviction.
Current conditions share similarities with previous cycles.
However, although indicators suggest that a cooling phase may be about to end, the market response remains far from definitive. The possibility of a new withdrawal persists.
Ethereum’s cooling phase
Recent analysis indicates that ETH has gone through a cooling phase historically associated with potential price rebounds over multiple cycles.
This phase is measured using the Market Temperature metric, which combines three key indicators: Market Value to Realized Value (MVRV) Z-Score, Net Unrealized Profit/Loss (NUPL), and Realized Value to Transaction Ratio (RVT).
The metric identifies a cooling phase when it falls to level 0 or below.
At press time, Ethereum’s market temperature sat slightly above freezing, suggesting that even if the market cools, further decline could still occur before a sustainable recovery emerges.
Source: Alphractal
On X, Alphratal commented on the implications of trading within this zone:
“These areas reflect periods where unrealized profits decline, valuations become more balanced, and emotional excesses fade from the market.”
Historically, these conditions have acted as a catalyst for growth.
However, cures rarely occur immediately. Markets often need time to rebuild conviction before a rally materializes. In the meantime, ETH could trade lower or continue to move within a tight range that would limit bullish momentum.
Demand remains low
Demand clearly remains subdued, increasing the likelihood that ETH will continue trading near the lower end of its range. Sentiment remains cautious in institutional and spot markets.
Institutionally, the US Spot Ethereum exchange-traded funds (ETFs) saw one of their lowest inflow days since inception, with just $10.26 million worth of ETH absorbed by the market according to SoSoValue.
Although the positive inflow can be interpreted as slightly constructive, its magnitude confirms that the bullish conviction remains fragile.
In fact, the two trading sessions preceding the latest figure saw combined outflows of $242.2 million.
Source: SoSoValue
February, as a whole, saw only one session of notable positive inflow, when $57.05 million entered the market. This figure pales in comparison to the average net inflow of $108.19 million seen during periods of higher demand.
Spot market activity reflects this weakness.
At the time of writing, Exchange Netflows showed approximately $28 million worth of Ethereum (ETH) purchased on the market. However, the previous session saw net selling pressure of $23 million, partially offsetting this demand.
The continued absence of strong buying interest continues to weigh on price action, limiting Ethereum’s ability to capitalize on its cooling phase – a period typically associated with structural recovery.
Supply dynamics are changing
In a recent report, AMBCrypto highlighted the changing supply dynamics on Ethereum exchanges.
Foreign exchange reserves have declined steadily, while ETH deposit addresses and the number of transactions have also declined. In theory, reduced FX supply often favors bullish setups by limiting liquidity on the sell side.
However, supply contraction alone cannot support a recovery. Without strong demand and improved confidence, price expansion remains limited. Institutional flows remain moderate and spot traders continue to show hesitation.
For Ethereum to move into a sustained bullish trajectory, several conditions must align. A recovery phase alone is not enough. The market also requires stronger demand, improved confidence and renewed institutional participation.
Until these elements converge, ETH may remain range-bound or vulnerable to further declines before a decisive rally takes hold.
Final Summary
- Ethereum traded near the $2,000 level for the first time since its consolidation phase from March to May 2025.
- US Spot ETH ETFs absorbed just $10.26 million during a recent session, one of the lowest inflow days since their launch.
