Ethereum breaks through $1900, traders aim for $2,100

Ethereum (ETH) resumed its correction under pressure from leveraged traders, having previously approached the $1,950 zone strongly.

Tuesday's price rise triggered the liquidation of about $62 million in short positions, as Ethereum gained about 29% after hitting a low near $1,500 on June 26 and briefly tested the $1,950 level for the first time in about seven weeks. This price change also reflects an overall improvement in market risk appetite. Bitcoin climbed above $66,500, while stocks strengthened as investors reassessed concerns about overvaluations of artificial intelligence-related stocks following their rapid rise.

Key Points

Ethereum's attempt to break around $1,950 was accompanied by a significant leveraged liquidation, indicating that traders had previously widely bet on decline. Ethereum's fundamentals have not kept pace: Decentralized application (DApp) revenue and weekly Decentralized Exchange (DEX) transaction volume remain weak compared to previous months. A record pledge participation rate (34% of ETH supply, according to StakingRewards) may have dampened selling pressure, but this has not yet translated into stronger on-chain demand. Although derivatives indicators are not as bearish as at the end of June, the funding rate for Ethereum perpetual contracts has been difficult to maintain within the typical neutral range. Next week's earnings reports from major U.S. technology companies will be a key catalyst, potentially determining whether market optimism can continue into the cryptocurrency space.

Price rebound suffers from uneven participation in the Ethereum ecosystem

Despite the resurgence of bullish momentum, Ethereum's activity indicators warn of caution. On-chain data from the network shows that this round of rise is driven more by overall market sentiment than a significant acceleration in actual usage. According to DefiLlama, weekly revenue for Ethereum decentralized applications (DApps) fell to $9.8 million, the lowest level since September 2024. This data is important because DApp revenue is often seen as a proxy for actual demand and users 'paying propensity, while simple price increases may be driven only by derivatives positions and macro capital flows. DefiLlama's data also shows that trading volume on decentralized exchanges (DEX) has slipped to about $7.2 billion per week. In this environment, traders 'enthusiasm for high-turnover assets that typically boost activity, including memocoins and certain functional tokens, appears to have waned.

Revenue from top apps is also mixed. DefiLlama pointed out that some well-known projects are under pressure this year, with tokens including Ethena (ENA), Mantle (MNT) and Arbitrum (ARB) having dropped 50% or more year-to-date. Although the performance of a single project does not directly determine the direction of Ethereum, general weakness in major ecosystems may limit the growth of organic demand in the rising market.

Cooling in derivatives markets suggests traders are not fully convinced

Ethereum's rebound was accompanied by a shift in sentiment in the derivatives market, but there was no decisive turn, allowing traders to establish firm long positions. Laevitas data shows that in the past month, the annualized funding rate for Ethereum perpetual contracts has been difficult to maintain stably within the "neutral" range of 6%-12%. This is an important nuance: when the funding rate is close to neutral, it usually indicates that the demand from both long and short sides is more balanced; when the funding rate continues to deviate from this range, it may imply a unilateral position, increasing the risk of reversal. Still, the current sentiment has improved compared to late June, when funding rates turned negative, reflecting strong bearish demand. This improvement is consistent with market expectations that pledge activity may help reduce downside risks.

Pledge participation rate hits record high, but the market still needs catalysts

Pledge is a key supporting factor in the price structure of Ethereum. A record 34% of total ETH supply is currently pledged, up from 33% just a month ago, according to StakingRewards. From a practical perspective, a higher pledge participation rate could reduce the amount of ETH available in the market, potentially reducing immediate selling pressure during a price rebound. The continued increase in institutional holdings further strengthens the pledge narrative. Sources say that Tom Lee's Bitmine Immersion (BMNR US) has increased its holdings of 156,719 ETH units in the past month, bringing its pledge volume to 4.8% of available supply. In addition, previous reports focused on Bitmine's ethereum pledge revenue, highlighting how large holders can deploy through pledges rather than liquidity transactions. Even so, if demand on the chain remains sluggish, the pledge participation rate alone may not be enough to maintain the rising market. Similarly, the chain situation of sluggish DApp revenue and declining DEX trading volume also explains why the derivatives market has not fully "turned on the long throttle." In other words, over-the-counter funds may be more willing to absorb downside risks rather than chase upside space.

Ethereum is still far from its all-time high in August 2025-current prices are reported to be 61% below that peak-which may dampen risk appetite. Traders may remain reluctant to enter heavily until they see clearer evidence that the scope of activity and demand on the chain is expanding, rather than just a macro-driven rally.

Major U.S. technology companies may decide whether Ethereum can make further breakthroughs

Whether Ethereum can expand its gains to the next key psychological level, often thought to be $2,100, may depend on whether risk appetite in traditional markets and the cryptocurrency space continues to rise. On Tuesday, the short-term background was positive: A stronger stock market helped ease concerns about valuation after an artificial intelligence-driven rapid rally. Looking to the future, the market will focus on corporate financial reports to determine whether the trend of "risk appetite" can continue. The report pointed out that 3M Corporation's (MMM) earnings report after the opening of trading on Tuesday was part of the catalyst for the beginning of the week. More important to the cryptocurrency space is that Alphabet will announce earnings after the U.S. stock market closes on Wednesday. According to reports, investors are focusing on the growth of the Cloud Services business. It is expected that cloud business revenue will increase by 64% against the background of a large amount of artificial intelligence investment. If earnings results and guidance reinforce a stable macro background, it will help restore confidence in risky assets-which may provide additional impetus for Ethereum to test higher prices without relying mainly on clearing-driven markets.

For traders and long-term observers, the next signals to pay attention to are clear: whether Ethereum can hold on to its recent breakthrough range after the liquidation wave; whether DEX trading volume and DApp revenue will continue to stabilize or decline further; and whether derivatives funding rates can return to a more sustainable neutral range with the implementation of macro catalysts.