Ethereum price struggles with key resistance
Ethereum is currently struggling to stay above $2,100. The main problem appears to be decreasing bullish leverage across the entire market. Some institutional traders are actually withdrawing their capital, which does not help the situation.
What is interesting, however, is the technical side of things. The network processes many transactions – almost 14 million in the last week alone. But here’s the paradox: all this activity doesn’t translate into increased revenue for the main chain. In fact, fee revenue fell 71% from February highs.
Derivatives Market Shows Bearish Sentiment
Laevitas’ data paints a pretty clear picture. Funding rates are below the neutral range, between 6% and 12%. When funding rates are this low, it usually means bearish sentiment dominates the derivatives market. Basically, the cost of maintaining long positions has decreased significantly.
I think this tells us something about traders’ expectations. They are not willing to pay much to hold long positions at the moment, which suggests they do not see an immediate upside. The options market reinforces this view: puts trade at a 7% premium to calls.
Layer 2 solutions are changing the economy
Some of the revenue decline makes sense when you consider the direction the business is heading. The ecosystem is successfully moving transactions to layer 2 solutions. This is good for users because it reduces costs, but it has an unintended consequence: it limits the amount of ETH burned by fees.
So we have a situation where Ethereum is actually being used more, but the main chain is not capturing as much value from that usage. It’s a strange position to be in.
Some positive signs remain
Despite the pressure on prices, the fundamentals remain strong. The total value locked in DeFi stands at $56 billion, which is quite robust. Ethereum maintains its dominance over its competitors in this area.
Looking ahead, Vitalik Buterin confirmed that the Hegota upgrade and account abstraction should arrive in about a year. These developments aim to simplify gas payments using other tokens, which could make the network more user-friendly.
But the macroeconomic context does not help. Sharplink reported losses of $735 million for 2025, making long-term investors more cautious. This kind of news tends to ripple across the entire crypto space.
What comes next
Ethereum really needs to regain confidence in the options markets. The immediate technical objective is to break above the $2,200 resistance level. If he fails to do so, we could see more lateral moves.
The network faces an interesting challenge: it succeeds in passing through layers 2, but this success changes the business model. Lower fees are great for adoption, but they affect the burning mechanism that was supposed to make ETH deflationary.
Maybe future upgrades will fix some of these issues. Account abstraction in particular could attract new users to the ecosystem. But for now, derivatives data suggests traders are bearish, and price action reflects that sentiment.
