Ethereum price falls to $3.3K, but data shows ETH bulls are still in control

Ether (ETH) price dropped to $3,337 on Dec. 26, erasing gains from the previous two days. This movement followed a 4% decline in Bitcoin (BTC) and triggered $34 million in liquidations of leveraged ETH longs (buyers). Investors grew more risk-averse as signs of weakness emerged in the United States job market.

Despite the failure to maintain prices above $3,500 over the past week, Ether derivatives markets retained a neutral to bullish stance, suggesting $4,000 remains within reach. Notably, stablecoins in China are trading at parity with the official US dollar rate, indicating no significant outflows from cryptocurrencies in the region.

The USDT premium in China has hovered near parity over the past week, reflecting neutral market sentiment. Typically, heightened demand pushes stablecoins to trade at a premium of 1.5% or more above the official US dollar rate, while bear markets often lead to discounts.

Ether derivatives maintained levels similar to the previous week, suggesting traders remained unfazed by repeated failures to break above $3,500. ETH monthly contracts are trading with an 11% premium over the spot market, slightly above the 5% to 10% neutral range.

Although Ether traders might feel disheartened by the 9.5% decline in a single week, even gold—considered the world’s largest store of value—has dropped 4% in the last two weeks. Investors have shifted to cash positions, driving the US dollar index (DXY) to its highest level in two years.

The US dollar has strengthened against other major global currencies, as reflected in the DXY index, which rose to 108.3 on Dec. 26, up from 106 a month earlier. Concerns about the Federal Reserve’s ability to cut interest rates next year have fueled the dollar rally, as traders pivot to cash positions amid heightened recession risks.

Investors are increasingly skeptical about the reliability of official employment data. A Dec. 12 report by the Philadelphia Fed estimated weaker state-level employment in Q2 compared to BLS figures, indicating a potential downward revision of 818,000 payrolls through March across 25 states.

Global economic concerns have also escalated. The prospect of new tariffs on U.S. trading partners threatens to exacerbate price pressures and weigh on long-term growth, according to Reuters. Meanwhile, data released on Dec. 26 revealed that new U.S. jobless claims fell to a one-month low, signaling a cooling yet stable labor market.

To assess Ethereum investor sentiment, monitoring network deposits is essential. Demand for ETH is driven by decentralized applications (DApps), making onchain activity a critical indicator for price projections.

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Ethereum’s total value locked (TVL) has remained steady at approximately 20 million ETH over the past two weeks, underscoring resilience. Over the last 30 days, notable gainers include Ethena, up 49%, and Morpho, up 47%, per DefiLlama data. Most Ethereum DApps experienced deposit increases, with Maker being a notable exception, down 12% during the period.

Both derivatives and onchain metrics suggest traders maintain a positive outlook for Ether price. However, a move toward $4,000 will hinge on broader global economic performance.