Ether has rebounded 15% from last week’s lows, but on-chain data and derivatives positioning show that large holders remain unconvinced. With Ethereum’s total value locked (TVL) shrinking, network fees falling and whales reducing exposure, the probability of a near-term rally toward $4,000 continues to weaken.ETH derivatives show fading bullish appetite as network activity softensETH has recovered to the $3,080 level, but derivatives metrics suggest traders are unwilling to deploy fresh leverage. Perpetual futures funding rates — which typically sit in the 6%–12% annualized range during healthy bullish periods — have hovered near zero since Monday.Much of this hesitation can be traced back to ETH’s 20% flash crash on Oct. 10, which triggered heavy liquidations across centralized and decentralized venues. The impact continues to be felt across Ethereum’s core metrics:Ethereum TVL dropped from $99.8B (Oct. 9) to $72.3B today (DefiLlama)Network fees fell 13% over the past weekTransaction count remains stable, creating a divergence that worries analystsLower fees signal weaker demand for block space. Because ETH’s burn mechanism depends entirely on on-chain activity, softening fee revenue risks pushing supply dynamics back toward inflationary territory — a trend that whales are watching closely.At OKX, aggregated spot, futures and margin data shows top ETH traders leaning 23% net short, reinforcing a lack of conviction. Market makers have repeatedly avoided building long exposure even during ETH’s rebound.Macro uncertainty and weakening labor data erode ETH investor confidenceBeyond on-chain weakness, U.S. macroeconomic data is adding pressure.Yahoo Finance and Reuters report:U.S. consumer spending slowed following the prolonged government shutdownMore than 25,000 job layoffs were announced in NovemberCompanies cite rising operating costs and tightening margins“You don’t have mass layoffs when the economy is strong,” said Adam Sarhan, CEO of 50 Park Investments.A softening labor market typically weighs on risk assets, including ETH. At the same time, broad economic fragility forces the U.S. government to continue expanding debt to support growth. Historically, such conditions have increased investor interest in alternative assets — a potential tailwind for Ether — but that shift has not yet materialized in derivatives markets.The Federal Reserve’s next policy steps could play a pivotal role. A weaker economy raises the probability of a more accommodative stance in early 2026, but traders are waiting for clearer signals before rotating back into ETH at scale.Can ETH still reclaim $4,000? Liquidity will decideFor now, ETH remains constrained by three bearish forces:Shrinking TVL and lower network feesNo bullish leverage from whales or top tradersMacro uncertainty tied to U.S. labor markets and slower consumer demandThe path toward $4,000 requires a clear shift in liquidity conditions — either from improving macroeconomic signals, renewed on-chain demand, or a recovery in risk appetite.At present, institutional and whale behavior suggests investors are still prioritizing tech equities and bonds rather than rotating aggressively into Ether.Until fresh liquidity enters the market, the probability of ETH staging a decisive rally back to $4,000 remains limited.
Miyuki
Brian
Weiliang