Ethereum Eyes $2,100 as Staking Growth Counters Weak Onchain Activity
Ethereum's native token, Ether (ETH), continued its recent rebound after climbing to nearly $1,950 on Tuesday, its highest level in almost two months. The rally triggered roughly $62 million in liquidations of bearish leveraged positions and extended ETH's recovery to around 29% from its late-June low near $1,500.
The move came alongside renewed optimism across financial markets, with Bitcoin reclaiming levels above $66,500 as investors embraced risk assets. A stronger performance in U.S. equities also helped improve market sentiment after concerns that soaring artificial intelligence stocks had become overvalued.
Attention is now shifting to Alphabet, Google's parent company, which is scheduled to release its quarterly earnings after U.S. markets close on Wednesday. Investors are anticipating another strong report, fueled by continued expansion in the company's cloud computing business and AI-related investments. Positive guidance from one of the world's largest technology companies could provide another boost for both traditional markets and cryptocurrencies, potentially helping the digital asset market regain a total valuation above $2 trillion.
While Ethereum has benefited from the broader market recovery, activity on its blockchain remains relatively subdued. Network usage has yet to return to the levels recorded earlier this year, reflecting weaker demand for decentralized applications and reduced speculation in memecoins and smaller crypto tokens.
Several major Ethereum-based projects continue to trade well below their previous highs. Tokens such as Ethena (ENA), Mantle (MNT), and Arbitrum (ARB) have all posted significant declines this year, highlighting the slower pace of activity across the ecosystem.
The slowdown is also visible in protocol revenues. Ethereum decentralized applications generated approximately $9.8 million in weekly revenue, marking one of the weakest performances since late 2024. Sky, formerly known as MakerDAO, remained one of the network's strongest earners with roughly $3.2 million in weekly revenue, while Chainlink generated around $1.2 million. Decentralized exchange volumes have also softened, falling to approximately $7.2 billion on a weekly basis.
Despite these weaker onchain fundamentals, derivatives markets have shown signs of stabilization. Funding rates for ETH perpetual futures have recovered from the negative territory seen in late June, although they continue to hover below the neutral range that typically reflects balanced market sentiment. This suggests traders have become less bearish but remain cautious about the strength of the current rally.
One factor supporting Ethereum's longer-term outlook is the continued rise in staking participation. According to recent industry data, approximately 34% of the total ETH supply is now locked in staking contracts, reaching a new record. Just one month ago, that figure stood at 33%, illustrating steady demand from long-term investors seeking staking rewards.
Higher staking participation effectively reduces the amount of ETH available for trading, helping ease potential selling pressure. Institutional accumulation has also reinforced this trend. Bitmine Immersion Technologies, backed by investor Tom Lee, has significantly expanded its Ethereum holdings over the past month, adding more than 156,000 ETH and bringing its share of the available supply to roughly 4.8%.
Even with the recent recovery, Ether remains about 61% below its all-time high recorded in August 2025. That gap continues to limit bullish conviction, with many investors waiting for stronger network activity before expecting a sustained breakout.
For now, Ethereum's next move may depend less on blockchain metrics and more on broader market conditions. If Alphabet delivers stronger-than-expected earnings and improves confidence across global markets, the positive momentum could provide the catalyst ETH needs to challenge the $2,100 level in the coming weeks.