Overview

• ETH reclaimed $3,000, but derivatives data shows traders remain cautious despite the price rise.

• Ethereum ETFs face ongoing delays, keeping institutional sentiment uncertain.

• Recent upgrades like Pectra and Fusaka strengthen Ethereum’s tech, but clearer usage growth is needed to boost confidence.

Ethereum has once again crossed the important $3,000 mark, trading around $3,200. The move has brought renewed attention to the crypto market, especially since the rise happened during a broader recovery in global risk assets. 

Many traders are still unconvinced that Ethereum price is ready for a strong and sustained rally. Recent market behavior, regulatory delays, on-chain signals, and Ethereum’s performance relative to Bitcoin all show why caution remains high.

Also Read: Why Ethereum Dropped and What it Means for December 2025

Derivatives Markets Show Doubt Despite Price Rise

Ethereum’s quick 8% jump in a single day created excitement in the spot market. However, the derivatives market tells a different story. In healthy bull trends, futures traders usually pay high premiums to gain leveraged exposure. This time, futures funding rates and the basis between futures and spot prices have increased only slightly. 

These levels do not match the enthusiasm seen in previous strong market cycles. Options trading behavior also reflects skepticism. Prices for out-of-the-money call options have not surged, which means traders are not expecting explosive upward movement. 

Ethereum ETF Delays Are Slowing Market Confidence

One major reason for the cautious mood is the slow and uncertain progress on Ethereum exchange-traded funds. In mid-November, the Securities and Exchange Commission extended its review of Fidelity’s proposed spot Ethereum ETF. The regulator said it needed more time to evaluate issues related to staking and custody. The agency also delayed decisions on staking-enabled Ethereum ETFs suggested by large asset managers, including BlackRock, Fidelity, and Franklin Templeton. These delays were grouped with similar decisions for XRP and Solana-based ETF proposals.

At the same time, a separate regulatory upgrade introduced a faster approval structure for compliant crypto ETFs. Under this framework, certain funds can be approved in about 75 days, which is much quicker than older processes. While this is a positive long-term sign, it also creates short-term confusion. Traders now have to guess whether Ethereum ETFs will fit smoothly into the new fast-track system or continue facing repeated delays due to staking-related concerns.

Another development added a layer of complexity: Vanguard, the major investment firm that had steered clear of crypto exposure, began allowing clients to access third-party crypto ETFs and mutual funds, including those linked to Ethereum. The shift shows growing acceptance of digital assets within traditional finance. But it also raises questions about where new institutional money will actually go. Instead of buying ETH directly, many institutions may choose broader crypto baskets or low-fee index funds, which means the impact on Ethereum’s price could be slower than expected.

Ethereum Still Trails Bitcoin, Affecting Investor Sentiment

Ethereum's performance relative to Bitcoin has also added to the uncertainty. At one point in 2025, Ethereum experienced a drawdown of over 50% from its yearly highs. At that same time, the ETH/BTC ratio plunged to a five-year low. That trend continued well after options based on Ethereum ETFs launched on major exchanges such as Nasdaq and Cboe.

This underperformance matters as a lot of big funds adopt a "Bitcoin-first" strategy in uncertain markets. With mixed global economic data and volatile government bond markets, risk-averse investors often treat Ethereum as a higher-risk asset than Bitcoin. When ETH climbs to levels like $3,000, many institutional traders prefer to rebalance portfolios rather than add more exposure. 

Ethereum Price Prediction: Network Upgrades and Speculation

From a technical perspective, Ethereum has rarely been in better shape. The Dencun upgrade, which went live in March 2024, introduced EIP-4844 (proto-danksharding) and sharply reduced data costs for Layer-2 networks. By March 2025, average gas fees had fallen from around 72 gwei a year earlier to below 3 gwei. More recent figures place average transaction fees near $1.85, supported by higher rollup adoption and about 35% less congestion on the main chain.

These changes are very positive for the long-term health of the token’s price, but the flip side is a lower ETH burn rate. During high-fee regimes and intense on-chain activity, Ethereum would often enter phases of deflation that strengthened the "ultra-sound money" narrative. With lower transaction costs, the burn has normalized, removing a key driver of speculative enthusiasm seen in earlier cycles.

The upgrade cycle has continued at a rapid pace. The Pectra upgrade went live on May 7, 2025, and provided enhancements to account abstraction, validator efficiency, and smart contract flexibility. More recently, the Fusaka upgrade launched on December 3, further scaling improvements and refinements to the network's execution and consensus layers. However, traders are waiting for clear data showing greater usage, higher fee revenue, and stronger economic activity before assigning substantially higher valuations to ETH.

DeFi and On-Chain Activity Grow Slowly

Ethereum and its layer-2 scaling solutions remain the home of decentralized finance, NFTs, and on-chain gaming. However, the activity is far from the explosive peaks seen in the previous cycles. Total Value Locked across DeFi has recovered, but the recovery isn't convincing enough for traders to believe the next strong bull trend has started.

Lower gas fees mean more users can use on-chain applications, but it also cuts into the network's fee revenue. This further softens the earlier narrative that high activity would continuously burn ETH and decrease supply.

Also Read: Will Ethereum (ETH) Reach $4,200 by the End of 2025?

Outlook

With Ethereum trading near $3,200, the market is at an interesting balancing point. On one hand, the network is getting cheaper, faster, and more scalable. Institutional interest is growing, and regulatory structures are slowly but surely improving. On the other hand, delays in ETFs, weaker relative performance versus Bitcoin, lower fee burn, and cautious derivative positioning continue to weigh on sentiment.

Ethereum's climb above $3,000 seems a cautious and calculated step rather than the start of a sharp rally. Whether ETH can maintain higher levels depends on upcoming decisions concerning ETFs, actual growth in real usage following new upgrades, and increased activity across the DeFi and Layer-2 ecosystems.

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FAQs

1. Why are traders still skeptical even though ETH crossed $3,000?

Many traders remain cautious as futures and options data show weak bullish conviction, and Ethereum has been underperforming Bitcoin.

2. How are Ethereum ETF delays affecting the market?

Regulatory extensions and uncertainty around staking features continue to slow institutional inflows, keeping sentiment mixed.

3. What impact did the Pectra and Fusaka upgrades have on Ethereum?

Pectra (May 7, 2025) and Fusaka (December 3, 2025) improved scalability, validator performance, and user experience, strengthening Ethereum’s technical foundation.

4. Why are Ethereum’s transaction fees so low now?

After the Dencun upgrade with EIP-4844, Layer-2 data costs dropped significantly, reducing mainnet congestion and bringing average fees near $1.85.

5. Is Ethereum still deflationary after recent upgrades?

Lower fees mean less ETH is burned, so the network is no longer consistently deflationary, which softens the earlier “ultra-sound money” narrative.