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Negative market metrics like funding rates and MVRV suggest Ethereum may be near a potential bottom.
ETH ETFs are showing renewed institutional interest, signalling growing confidence in Ethereum.
Ethereum's supply growth is slow but stable, keeping long-term value prospects intact despite short-term pressure.
Will ETH hit its market bottom? The current crypto market is divided over this key aspect. With Ethereum price hovering around $3,742, the broader context of investor sentiment, institutional flows, network metrics, and supply dynamics must be considered.
The term “negative metric” here refers to measures such as funding rates in futures markets, unrealised losses by holders (e.g., MVRV), and supply/issuance shifts. These metrics help understand whether the worst might already be behind or still ahead.
In futures markets, a negative funding rate means that shorts are paying longs to keep positions open, which signals that many traders believe the asset will continue to fall. Meanwhile, an MVRV (Market Value to Realised Value) ratio below 1 implies that holders, on average, would realise a loss if they sold at current prices, pointing to broad-based investor stress. When either or both metrics turn deeply negative, it can suggest a cap-in-place environment where fewer sellers remain, raising the odds of a price reversal.
However, these signals alone do not guarantee a bottom; they must be paired with improving fundamentals or concrete demand flows to be more meaningful.
Institutional money has become a key part of the Ethereum narrative. Spot Ethereum ETFs have been listed since mid-2024, offering a regulated pathway for large investors. According to recent data, spot Ethereum ETFs added over $114 million in a single week as of early November 2025, after a prior week of outflows. At the same time, total inflows since their inception have exceeded $14.3 billion. These flows suggest renewed institutional appetite.
In another data point, during the first week of October 2025, these ETFs reportedly recorded $1.30 billion in net inflows, with one large provider accounting for $691.7 million of that. Total assets under management in ETH spot ETFs were reported at approximately $30.6 billion, representing approximately 5.6% of ETH’s market capitalization.
On the other hand, flow data also show rotational behaviour: for instance, in one week, Ethereum ETFs experienced $244 million in outflows while its peer, Bitcoin, saw inflows of about $446 million. That suggests that institutional allocations are dynamic and that capital sometimes shifts between crypto assets rather than simply entering the space.
One often-cited pillar of Ethereum’s value is its post-Merge (September 2022) regime under Proof-of-Stake (PoS) and its fee-burning mechanism (EIP-1559). Originally, that change was expected to make ETH ‘ultrasound money’, with supply shrinking or at least minimal inflation. Yet by early February 2025, data showed the circulating supply of ETH stood at approximately 120.52 million ETH, which was slightly above the supply at the time of the Merge. That indicated a net increase, meaning issuance outpaced burn during that period.
By Q2 2025, the supply figure had increased only marginally to 120.7 million ETH, with an annualised inflation rate of about 0.7%. Network fees in ETH terms had fallen by around 37% and in USD terms by about 53% compared to prior periods, reflecting migration of activity to Layer-2 networks. The result: fewer fees burned on L1, hence weaker deflationary pressure. Thus, the supply side remains a watch point: while ETH is not inflating rapidly, it is not aggressively deflationary either, which softens a key bullish narrative.
Also Read - ETH Liquidations Explained: How They Affect Crypto Trading
Putting together the above pieces: negative-leaning derivatives positioning (or depressed investor metrics), improving institutional flows, and a supply environment that is not worsening, gives a plausible groundwork for a base. The institutional flows via ETFs suggest that large investors are willing to build or rebalance ETH exposure.
The supply and issuance dynamics are not actively undermining the bullish case. Meanwhile, derivative and funding metrics provide the psychological side of the bottoming equation. When losses are widespread and capitulation is imminent, the path to recovery often becomes apparent.
Despite these rationales, several caution flags stand out. First, ETF flows remain episodic and subject to rotation; inflows in one week can be reversed in the next, as seen in the instance of a $244 million outflow.
The supply environment, though stable, is less compelling than when ETH was aggressively deflationary; the shift of activity to Layer-2s means less burn on Layer-1, which weakens one dimension of the narrative.
Macro and derivatives risks still loom: funding rates can remain negative for extended periods, and institutional sentiment can pivot quickly if broader risk assets come under pressure.
Recent commentary underscores the mixed but improving backdrop. The crypto market in early November 2025 is described as “cautious” with ETH struggling below $4,000 while broad crypto signals lean “Sell” or “Strong Sell”. Nonetheless, some technical overlays suggest a “bullish flag” pattern for ETH with institutional flows rising again.
Citigroup has set a year-end target for ETH of about $4,300, citing structural demand but also cautioning that current prices may reflect sentiment rather than fundamentals. Another bank offers a more bullish scenario of $7,500, assuming strong uptake of stablecoins and tokenisation on Ethereum’s network.
Also Read: Ethereum Treasury Crosses 6 Million ETH: What Does it Mean?
The presence of positive metric signals, such as renewed institutional flows and a manageable supply backdrop, is an encouraging sign for Ethereum. They suggest that the potential floor may be forming rather than the crash continuing indefinitely.
However, without strong confirmation, the bottom remains plausible but unconfirmed. The interplay of derivatives sentiment, institutional demand, and underlying network fundamentals makes this a nuanced and evolving story.
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1. What does the “negative metric” for Ethereum mean?
It refers to indicators like negative funding rates or MVRV below 1, showing most traders are bearish or holding unrealised losses, often seen near market bottoms.
2. Are ETH ETFs affecting Ethereum’s price movement?
Yes, ETH ETFs are bringing institutional money into the market, and large inflows can help support Ethereum’s price and improve investor confidence.
3. Is Ethereum’s supply still deflationary after the Merge?
Not always. ETH supply has slightly increased at times as network fees and burning have slowed, especially with more activity shifting to Layer-2 networks.
4. Can negative funding rates confirm that Ethereum has bottomed?
No, negative funding rates suggest bearish sentiment but do not confirm a bottom unless combined with rising demand, stronger price support, and positive inflows.
5. What key signs indicate Ethereum is recovering from a bottom?
Signs include funding rates turning neutral or positive, ETH ETFs seeing steady inflows, MVRV moving above 1, and Ethereum holding higher price lows consistently.
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