Ethereum traders have been focused on price candles, ETF flows and chart patterns for weeks, but the signal that may matter most isn’t coming from any of those sources.
- Low stablecoin yields suggest the market isn’t overheated yet.
- ETF inflows and improving ETH/BTC momentum hint at a potential rebound.
- Extreme fear has eased slightly, signaling sentiment may be stabilizing.
It’s coming from stablecoin lenders — the part of the market that tends to heat up before major tops and cool off before meaningful reversals.
Right now, according to Santiment, that segment of the market is calm. Too calm to suggest a cycle peak. Yields across leading platforms are hovering around 4%, far below the levels normally associated with aggressive leverage and speculative excess. For analysts at the firm, this subdued activity hints that Ethereum’s recent weakness may be a reset rather than the start of a deeper breakdown.
A Month of Pain Doesn’t Cancel Recovery Signals
Ethereum has been punished severely — losing more than 21% over the last 30 days — and the drop wiped out most of the optimism that followed early autumn highs. But even as prices bled, several structural indicators began to turn.
The ETH/BTC weekly chart is on the brink of flipping into a bullish configuration for the first time since July 2020 — the same type of shift that preceded Ethereum’s explosive performance during the last major cycle. At the same time, ETF demand quietly switched direction. After three weeks of heavy withdrawals, spot Ether funds recorded more than $300 million in net inflows this week, signaling renewed interest from institutions rather than retail traders alone.
None of these data points guarantee a recovery, but together they contradict the narrative of a market in freefall.
Sentiment Has Been Brutal, but Stabilizing
The emotional side of the market tells its own story. November pushed the Crypto Fear & Greed Index into “extreme fear” for more than half the month — its longest stretch in negative territory in years. The gauge has since improved, though only slightly, now sitting in “fear” rather than “extreme fear.”
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Historically, Ethereum performs well when sentiment climbs out of pessimism. On average, December has produced gains of around 7% since 2013. Whether that history matters this cycle remains an open question — especially since Bitcoin already violated its usual seasonal strength earlier in the year.
Why Stablecoin Yields Matter More Than Traders Think
In previous cycles, the crypto market didn’t top when prices were high — it topped when lenders were paying unusually high yields for stablecoins because speculative traders were borrowing aggressively to leverage their positions. Today’s flat yield environment suggests the opposite: leverage has been squeezed out rather than ramped up.
That’s why Santiment believes Ethereum could revisit the $3,200 zone, not because sentiment is great, but because speculative excess is absent.
The Bigger Picture
For now, Ethereum sits just below the psychological $3,000 level. The charts look broken, sentiment looks tired and traders are anxious. And yet the metrics that typically precede overheated cycle peaks — high funding rates, soaring stablecoin yields, retail-driven leverage — simply aren’t here.
Markets don’t turn when fear disappears. They usually turn while fear still dominates.
Alex is an experienced financial journalist and cryptocurrency enthusiast. With over 8 years of experience covering the crypto, blockchain, and fintech industries, he is well-versed in the complex and ever-evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His approach allows him to break down complex ideas into accessible and in-depth content. Follow his publications to stay up to date with the most important trends and topics.
Source: https://coindoo.com/ethereum-shows-early-rebound-signals-after-weeks-of-panic/