Ether may be poised for a short-term rebound, with onchain data suggesting the market has not yet reached overheated conditions, according to crypto analytics platform Santiment.
Key Takeaways:
- Santiment says low stablecoin yields show the crypto market is not overheated and Ether could test the $3,200 level.
- Yield data between 3.9% and 4.5% suggests leverage remains muted, reducing the risk of a near-term market top.
- Technical signals and $312.6M in Ether ETF inflows point to returning confidence after a sharp recent decline.
In a report published Saturday, the firm said muted stablecoin yields point to room for further price gains, with Ether potentially revisiting the key $3,200 level.
“Currently, yields are low, around 4%. This indicates the market has not reached a major top and could still push higher,” Santiment said, noting that Ether was trading near $3,001 at the time of the report.
That target implies an upside of nearly 7% from recent prices around $2,990, based on CoinMarketCap data.
Low Stablecoin Yields Signal Crypto Market Isn’t Overheated
Santiment tracks yields from major crypto lending protocols, where interest rates often reflect the amount of leverage flowing into the market.
According to the firm, stablecoin returns are sitting between 3.9% and 4.5%, a range that suggests borrowing demand remains subdued.
Historically, spikes in yields have coincided with speculative excess and trend reversals, making today’s comparatively low levels a sign that risk-taking is still measured.
The outlook follows a difficult month for Ether, which slid more than 21% over the past 30 days as part of a broader digital asset selloff.
The downturn accelerated after a steep $19 billion liquidation event on Oct. 10, which was compounded by renewed trade uncertainty following US President Donald Trump’s announcement of sweeping tariffs on Chinese imports.
Technical indicators are also starting to lean constructive.
Crypto analyst Matthew Hyland said the ETH-BTC weekly chart is approaching a “bullish ribbon flip” for the first time since mid-2020, a signal that in past cycles has marked the start of extended outperformance against Bitcoin.
Flows into exchange-traded products are adding to the shift in tone.
Spot Ether ETFs reversed course this week, drawing $312.6 million in net inflows after three weeks of sustained withdrawals, suggesting fresh interest from institutional buyers.
Santiment Improves as Sell-Off Eases
Sentiment across the market is improving as well.
The Crypto Fear & Greed Index, which spent 18 days in “extreme fear” in November, recently climbed back into the “fear” zone, hinting that panic-driven selling may be easing.
Seasonal patterns may also come into play. December has delivered an average return of nearly 7% for Ether since 2013, according to CoinGlass.
Still, with both October and November underperforming typical trends this year, traders remain cautious about leaning too heavily on historical playbooks alone.
As reported, ARK Invest CEO Cathie Wood has forecasted that the liquidity squeeze hitting crypto and AI markets will reverse within weeks, driven by three Federal Reserve policy shifts expected before year-end.
Her firm continues aggressively buying crypto equities during the downturn, deploying over $93 million in a single day this week across beaten-down digital asset stocks.
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