Ether remains under pressure as macro headwinds offset tightening supply

​​​Ether remains under pressure

​Over the past month, Ether (ETH) has remained under pressure but increasingly in focus as investors weigh short-term macro headwinds against tightening supply dynamics and renewed institutional and development-side signals.

​The period began with Ether trading defensively after a sharp pullback in November. ETH stabilised around the $2900–$2700 region, reflecting broader risk-off sentiment across global markets following mixed US inflation data and caution around the pace of future Federal Reserve (Fed) easing.

​Market participants noted that Ether’s failure to immediately rebound alongside equities highlighted its sensitivity to liquidity conditions and leveraged positioning rather than purely macro policy optimism.

​Analysts cited by Reuters described Ether’s behaviour as consolidative rather than corrective, pointing to reduced panic selling compared with previous drawdowns.

​At the same time, on-chain data has highlighted a significant structural shift in Ether’s supply profile. According to Glassnode data cited by CoinDesk, ETH balances held on centralised exchanges have fallen to their lowest level on record, below 9% of total circulating supply.

​Tokens have increasingly been moved into staking contracts, layer-2 ecosystems and institutional custody solutions, effectively reducing liquid supply available for trading. Analysts interpreted this as a sign of longer-term holder conviction, even as short-term price action remained capped by resistance levels.

​Institutional flows have painted a more nuanced picture. Ether-linked exchange-traded products have seen mixed activity, with Bloomberg reporting modest net outflows from some legacy ETH trusts while newer spot-based products, including BlackRock’s Ether ETF, continued to attract selective inflows.

​This divergence suggested that institutional investors were not exiting ETH wholesale, but rather rotating exposure towards more efficient structures and managing risk more actively around the $3000 level.

​On the development front, Ethereum delivered one of its most important technical milestones of the year with the activation of the Fusaka upgrade. The upgrade introduced PeerDAS, effectively doubling data availability for rollups and reducing layer-2 transaction costs.

​According to the Ethereum Foundation, the changes significantly improved scalability for rollup-centric applications without compromising decentralisation. This potentially reinforces Ethereum’s long-term investment case, particularly as competition among layer-1 blockchains intensifies.

​Derivatives positioning has underscored the market’s caution. Funding rates for Ether futures turned intermittently negative, signalling that traders were increasingly positioned for downside or hedging spot exposure.

​Analysts warned that while negative funding can sometimes precede short-term rebounds, it also reflected waning bullish conviction following Ether’s failure to reclaim the $3450 resistance zone.

​Despite these pressures, some longer-term investors continue to view recent price action as consolidation rather than structural weakness.

​JPMorgan’s digital assets research, suggested that Ether could outperform Bitcoin in a renewed risk-on environment due to its tighter supply dynamics, staking yield and expanding role in tokenisation and decentralised finance infrastructure.

​Taken together, the past month highlights Ether’s position at a crossroads. In the short term, ETH remains constrained by macro uncertainty, cautious institutional positioning and technical resistance. Yet beneath the surface, shrinking liquid supply, selective ETF inflows and meaningful protocol upgrades point to strengthening fundamentals.

​Whether Ether can translate these structural developments into sustained price gains will depend on improving liquidity conditions, clearer macro signals and renewed confidence across risk assets as markets move deeper into 2026.

​​Ether bearish case:

​Ether is seen coming off its early January $3306.78 high an is seen sliding towards the 55-day simple moving average (SMA) at $3022.98. Together with the 7 December and late December lows at $2925.33 - $2888.14 it may offer interim support.

​A fall through the Sunday 7 December low at $2925.33 would likely lead to the bears being back in control with the $2800 region perhaps being revisited.

​Ether bullish case:

​Ether needs to overcome Tuesday's $3306.78 high for it to head towards the $3447.01 December peak. If overcome, the ​200-day simple moving average (SMA) at $3622.95 may also be reached

​​Short-term outlook:

Bearish while below the 6 January high at $3306.78 

​​Medium-term outlook:

Neutral while above the November low at $2622.43 but below the $3447.01 December peak 

Ether daily candlestick chart