Ether rallies to $1,950 as staking offsets weak network usage
Ether's 29% price rally from its June low is supported by record staking rather than actual network usage, leaving the token dependent on broader risk appetite to push toward $2,100.
Ether tested $1,950 on Tuesday for the first time in seven weeks, extending a 29% recovery from its June 26 low of $1,500. The upward move triggered $62 million in liquidations across leveraged short positions. This momentum aligned with a broader risk-on shift across digital assets, which saw Bitcoin climb above $66,500.
Despite the price appreciation, fundamental network metrics remain decidedly weak. Weekly revenue for Ethereum's decentralized applications (dApps) dropped to $9.8 million, the lowest level since September 2024. Decentralized exchange volumes simultaneously contracted to $7.2 billion per week. Waning trader interest in memecoins and utility tokens has weighed heavily on major ecosystem projects, with Ethena, Mantle, and Arbitrum all posting year-to-date losses of 50% or more.
Rather than network usage, the current price rally is drawing support from a surge in staking activity. A record 34% of the total Ether supply is currently locked, up from 33% just one month ago. This accumulation reduces available float and limits sell pressure. Institutional buyers have accelerated this trend, highlighted by Tom Lee’s Bitmine Immersion, which added 156,719 ETH over the past month. The firm now controls 4.8% of the available supply.
Even with this structural support, derivatives traders remain unconvinced about a sustained upside. The annualized funding rate on Ether perpetual futures has struggled to maintain a neutral 6% to 12% range over the past month. Having endured a six-month bear market, investors are hesitant given that the price remains 61% below its August 2025 all-time high.
Overcoming this skepticism and pushing Ether toward the $2,100 mark will likely require a macroeconomic catalyst. Traders are heavily focused on Alphabet, which is scheduled to report quarterly earnings on Wednesday after the US market closes. Investors anticipate 64% growth in the company's cloud services revenue. Positive guidance could alleviate concerns over stretched artificial intelligence valuations, potentially lifting the total cryptocurrency market capitalization back above the $2 trillion mark.
