Key takeaways:

• Ether is struggling to sustain $2,400 due to low DEX volume and dwindling demand for decentralized applications.

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• Institutional investor outflows and feeble futures premiums suggest ETH lacks bullish demand for sustained growth.

Ether (ETH) saw a 6% correction between Wednesday and Thursday, retesting the $2,050 level and reflecting a risk-free environment fueled by uncertainty around the US and Israel’s war with Iran. Ether has lagged behind the total cryptocurrency market capitalization, prompting investors to wonder what could spark a sustained rally above $2,400.

The price of Ether has fallen 31% since the beginning of 2026, driven by a decline in decentralized application activity and cautious sentiment in the cryptocurrency space. Much of this selling pressure is due to a lack of regulatory progress in the United States, especially as the Trump administration has rekindled hopes for a more cryptocurrency-friendly era.

ETH under pressure due to ETF outflows and onchain activity

The US Senate is currently considering a ban on the profitability of stablecoins held on exchanges. While Coinbase is pushing back challenging, the move has added another layer of worry for investors. Banking groups argue that the GENIUS Act already prevents stablecoin issuers from directly distributing profits to holders, saying that using exchanges as intermediaries is simply a loophole.

A recent report by the Financial Action Task Force (FATF) also urged nations to tighten supervision as stablecoins become more common in cross-border payments and transfers using self-service wallets. The global anti-money laundering watchdog said peer-to-peer transactions make it harder for authorities to detect suspicious financial activity.

Beyond the regulatory setbacks, several indicators suggest circumscribed near-term recovery for Ether.

U.S.-listed spot ETFs have seen net outflows of $298 million since March 18, representing six consecutive trading days of redemptions. While these flows do not perfectly reflect institutional demand, especially after the introduction of ETFs with built-in staking features, investor risk perception remained unchanged with a native staking yield of 2.8%.

The decline in activity on decentralized Ethereum exchanges is a major concern as demand for the token wanes. The current weekly average of $9.4 billion is approximately 50% below levels seen in the last three months of 2025. If there is no improvement in this metric, Ether will likely struggle to maintain levels above $2,400.

On Thursday, monthly Ether futures were trading at a 2% premium to regular spot markets, indicating a lack of demand for bullish leverage. In neutral conditions, this ratio should be between 4% and 8% to compensate for the longer settlement period. ETH bears will likely remain confident until this indicator returns to the neutral range.

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There is no doubt that the main factors influencing the stock market weakening over the last two months were socio-economic events such as the war in the US and the Israel-Iran war. This risk-off mood contributed to Ether’s failure to recover its $2,400. However, improvement in the operation of the decentralized Ethereum exchange and greater convincing of institutional investors is still needed to maintain the growth dynamics.

Ether accumulation by multi-billion dollar companies like BitMine, SharpLink and The Ether Machine could act as a catalyst for ETH to outperform the broader cryptocurrency market when the tide turns favorable. For now, however, the price of ether remains under pressure.