Ethereum's Tarnished Reputation: Can the Leading Altcoin Restore Its Former Glory?

Ethereum Loses Almost Half Its Value from All-Time High

Strong Bullish Bets from Options Traders

Potential for Rebound on Fundamentals and Traditional Finance Backing

Investor sentiment toward the leading altcoin 'Ethereum (ETH)' remains strongly bullish.

Last week, after the ceasefire between Israel and Iran was announced, Bitcoin quickly recovered most of its recent losses and is challenging its all-time high again, whereas Ethereum is showing relatively sluggish performance. Although Ethereum also rebounded on easing Middle East tensions, it is still trading at $2,500, about 39% below its local high. That's a significant 49% lower than its all-time high (ATH) of $4,868 recorded in 2021.

Despite this, options traders dealing in long-term prediction products continue to forecast further gains for Ethereum. According to Deribit, a crypto options trading platform, as of the 30th, the strike prices for Ethereum options expiring in December of this year and June of next year are $2,563 and $2,630 respectively—levels above the current spot price.

The heavy concentration of call option demand is adding weight to the bullish outlook. According to CoinGlass data, on Deribit, the put-call ratio for open interests (OI) at each strike price is 0.33, meaning call option demand is about three times higher than put options. The put-call ratio represents the ratio of investors betting on price declines (put options) versus those betting on price gains (call options); a figure below 1 indicates that call option demand exceeds that of put options. In particular, the $3,200 and $3,000 call options have open interest sizes of $346 million and $283 million respectively, attracting the most attention from investors. This reflects investors' strong confidence that Ethereum will recover to the $3,200 level in the long term.

Investors on the blockchain-based prediction market platform Polymarket showed even more aggressive bullish sentiment. According to Polymarket on the 30th, 31% predicted that Ethereum would reach $4,000 within six months, and 21% and 14% bet on breakouts above $5,000 and $6,000 respectively.

Strengthened Fundamentals and Inflows from Traditional Finance Are Positive Signs

The main reasons for improved expectations for Ethereum are its strengthened chain fundamentals (intrinsic value) and ongoing inflows from traditional finance.

'Onchain School', a contributor to CryptoQuant, stated, "The amount of Ethereum staked increased by more than 500,000 ETH in the first half of June, surpassing 35 million ETH in total." He added, "Ethereum is one of the digital assets expected to perform positively as investor confidence in the network grows and circulating supply decreases."

According to CryptoQuant data, the current staking amount of Ethereum has reached a record high of 35.48 million ETH. This is about 30% of the total Ethereum supply. Unlike Bitcoin, which uses proof-of-work (PoW), Ethereum's network operates on proof-of-stake (PoS), allowing users to participate in network operations such as block creation and transaction validation through staking (depositing). The higher the staked amount, the more stable contract processing becomes, and the possibility of transaction manipulation by external attackers is reduced.

Inflows into exchange-traded funds (ETFs) and increased buying from traditional financial markets have also grown. According to CoinShares data, global Ethereum investment products recorded a net inflow of $120 million last week, marking ten consecutive weeks of inflows. This is the longest such streak since 2021 and suggests a significant increase in global investor interest in Ethereum.

More publicly traded companies are storing Ethereum. On the 24th (local time), Nasdaq-listed marketing company Sharplink Gaming announced it had purchased 12,207 ETH. With this latest purchase, Sharplink's total Ethereum holdings grew to 188,477 ETH (about $471 million). Among other companies, Bit Digital (27,623 ETH) and BTCS (14,600 ETH) are also accumulating Ethereum reserves.

Prominent on-chain analyst Crypto Dan commented, "The record-high amount of staked ETH and global accumulation are reinforcing Ethereum's network fundamentals."

He added, "The recent surge in global capital inflows is due to pre-emptive purchases by institutional, corporate, and whale investors anticipating a strong altcoin market in the second half of the year. If a full-fledged bull run begins, there could be an even stronger price surge centered around Ethereum."