• Ethereum availability on exchanges hits lowest since 2015, with only 8.97M ETH remaining a 16.4% drop in seven weeks.
• Open interest in ETH futures reaches a record 10.23M ETH, but price drops 28% since February 21, signaling market uncertainty.
• U.S.-based Ether ETFs see $307M in outflows over two weeks, highlighting weak institutional demand.

Ethereum (ETH) traded sideward in the last 24 hours and reported a week-on-week growth of just 4.27%. While there has been this slight strength, ETH remains below the psychological level of $2,000. Demand for ETH remains sluggish and does not provide room for a more convincing break in prices even as supply-side indicators suggest the possibility of a bullish setup.

A recent report by Santiment points out the steep drop in the availability of Ethereum on centralized exchanges, reaching the lowest since November 2015. At the moment, just 8.97 million ETH are stored on trading platforms, a whopping 16.4% decrease in just seven weeks.

This downturn is mainly fueled by the growing utilization of DeFi protocols and staking mechanisms, which encourage investors to hodl their ETH for the long term. A diminishing exchange supply is usually bullish, as it lessens selling pressure while indicating increasing confidence in the Ethereum network.

While the on-chain fundamentals for Ethereum are positive, the derivatives side presents a mixed picture. Ethereum futures open interest hit an all-time high at 10.23 million ETH on March 21, indicative of the spike in leveraged bets on ETH. Although the speculation has increased, the price of ETH has decreased by 28% since February 21, trailing the general crypto market.

The futures premium dropped below 4% as demand for long positions softened. Meanwhile, U.S.-based Ether ETFs have witnessed outflows totaling $307 million in two weeks, further dampening investor sentiment. Lower network fees and macroeconomic uncertainty are also adding to the bearish sentiment.

Crypto analyst Merlijn The Trader considers the present weakness in Ethereum as within the pattern of history and not the trend reversal. He quotes the instances where there have been such periods of capitulation before major rallies. According to his analysis, the present negative sentiment can turn out to be false; investors who are selling now could be selling at the bottom, and patient holders could benefit from the rally eventually.

Ethereum lacks the solid driver that would ignite demand. Present spot ETF outflows suggest there is no institutional demand in the current period. As per analyst Ted, the introduction of staking into Ethereum ETFs would prove to be the game-changer that would allow institutional investors to receive passive returns and increase the appeal for ETH as a long-term investment. Regulatory approval for the development won’t take place before the year 2025.

Until now, the price of Ethereum remains pressured. Sentiment remains bad, and ETH continues lagging behind Bitcoin, having just hit a new all-time low in the BTC pair. Long-term investors may take the current moment as the chance to buy, but Ethereum needs a better story if the bullish momentum needs to be restored.

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