Ethereum, institutional demand continues despite hacking woes... headed for $2,600?

▲ Ethereum (ETH)/AI-generated image

While Ethereum (ETH) has repeatedly failed to break past $2,400, leading to a slowdown in upward momentum, derivatives and on-chain indicators show that professional investors have not yet turned bearish, and the path towards $2,600 remains open.

Cointelegraph reported on May 12 (local time) that Ethereum's price failed to sustain its upward trend after peaking near $2,380 on Sunday. Ethereum has repeatedly failed to break above $2,400 over the past four weeks, somewhat eroding market confidence, but futures and options indicators have not shown signs that professional traders have drastically reduced positions or turned bearish.

Ethereum's annualized perpetual futures funding rate was 5% as of Tuesday, slightly below the neutral range of 6-12%. While this level does not reflect strong optimism, it has moved out of the negative funding rate territory observed last week. Cointelegraph explained that this figure suggests it is difficult to consider the market dominated by bearish forces.

The options market showed a similar trend. On Deribit, Ethereum put option trading volume has remained lower than call option trading volume since May 4. Demand for neutral or bearish strategies has also decreased over the past three weeks. This indicates that Ethereum whales and market makers have not yet drastically shifted to bearish bets.

However, factors continue to weigh on investor sentiment. The US Consumer Price Index (CPI) rose to 3.8% in April, reaching its highest level in over three years, with rising energy costs exacerbating inflationary pressure. Real average hourly wages also fell by 0.5% month-over-month. Within the Ethereum ecosystem, over $290 million was drained from several lending protocols, including Aave, due to the Kelp DAO rsETH bridge attack. The Ekubo protocol lost $1.4 million due to an EVM v2 swap vulnerability, and TrustedVolumes incurred a $6.7 million loss due to a protocol logic flaw. Cointelegraph reported that these incidents stemmed from individual protocol bugs and access control errors, not from flaws in Ethereum itself, EVM security, or Layer 2 bridge design.

The Ethereum Foundation's recent sale of Ethereum, $50 million in unstaking, and the movement of 10,000 ETH by an Ethereum ICO participant were also cited as factors increasing investor anxiety. However, Ethereum maintains a 53% share of total value locked in decentralized finance and leads in decentralized application activity, including the Layer 2 ecosystem. Assets under management for Ethereum spot ETFs also amount to $11.6 billion. Cointelegraph stated that the lack of strong leverage demand in the futures market should not be interpreted as a weakening of professional investor interest, and the possibility of Ethereum rising above $2,600 still remains.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*