ETH fell below $2,000 for the first time since early 2025, under pressure from negative sentiment in the cryptocurrency space. ETH may be in another period of repricing based on demand, sentiment, and real network usage.
ETH was trading at $1,972.82, after losing 13.4% over the past month. The token carries a net loss of about 6% for the second quarter so far. Based on the Ethereum Fear and Greed Index, the asset is trading with fear sentiment.
Ethereum’s market capitalization dominance decreased to 9.43%, while Bitcoin increased its dominance to 57.7%. ETH also remains stagnant at 0.027 BTC.
Aside from the usual price fluctuations, ETH tests the emotions of native cryptocurrency users. The chain has served as the technical and financial backbone of DeFi. Negative price movement is seen as a sign of capitulation, which may also impact fees and passive income in the ecosystem.
What will ETH traders do next?
The recent drop in ETH prices has already caused a loss of $241 million Long qualifiers During the last 24 hours. Based on Heatmap for filteringETH may drop to around $1,950 to attack the accumulation of long positions at this level.
Another possible scenario is a short squeeze, where the price moves to liquidate short positions around $2,100. At this point, it remains to be seen whether ETH is driven by derivatives traders or by more fundamental factors. Trading derivatives may push the price within a narrow range, resulting in positions being liquidated within that framework.
ETH open interest has risen to $12.5 billion Based on Coinalyze data, which suggests that recent price fluctuations are attractive to traders. CoinGlass data, including CME and smaller exchanges, puts ETH’s open interest at $32.69 billion, and rising recently with more aggressive short positions. Spot coin holders are rethinking their commitment to Ethereum and the asset’s long-term potential.
Will cheaper ETH undermine DeFi?
The price of ETH is closely tracked, as it is the backbone of DeFi lending, liquid mortgage tokens, and other collateral. Currently, more than 32% of all ETH is staking, giving some early adopters and large holders a reliable passive income. Ethereum is still generating fees of over $20 million, based on Token Terminal Dataalthough validation nodes still rely mostly on block rewards.
Meanwhile, Ethereum transaction fees have reached all-time lows, which somewhat reduces payments to miners and node operators. Despite this, there are over 3.8 billion ETH waiting to be wagered, and only about 200,000 ETH waiting not to be wagered.
The value of DeFi protocols on ETH is now $41.78 billion, down from more than $91 billion in August 2025. The combination of ETH weakness and Recent breakthroughs Which has undermined confidence in DeFi. The DeFi ecosystem is also shifting to other networks, with Solana and Hyperliquid emerging as more active DeFi hubs.
At Aave, loans fell to $8 billion, shrinking 14% in the past month. On Ethereum as a whole, active loans fell from $20 billion to around $16 billion, as a result of the contraction in the price of ETH and the fallout from the KelpDAO hack. However, DeFi has not seen a series of liquidations, as most ETH loans are liquidable at a much lower price.
ETH is also losing ground with mainstream investors, e.g Outflows from ETFs It has been resumed. The recent shift of investors to the stock market has also deprived cryptocurrencies of liquidity.
