Key takeaways:

• Ethereum ETF outflows and cautious investors show constrained confidence that the ETH price will continue to rise for now.

• Low derivative premiums suggest impoverished prospects for Ether’s price.

Ether (ETH) is down 11% over the past week, even after hitting $3,400 on Saturday. The decline was accompanied by a 4% correction in the Nasdaq index, which wiped out gains from the previous two weeks. Traders are currently debating whether ETH still has a chance to regain the $3,900 level.

Concerns about global economic growth come after frail quarterly results from consumer-facing companies and renewed concern about high valuations in the artificial intelligence sector. Meanwhile, the longest U.S. government shutdown in history continues to hurt the economy.

Ether futures are trading at a 4% premium to spot markets, unchanged from the previous week. The data shows constrained appetite for bullish positions, although it has not yet reached panic levels below 0%.

Under normal market conditions, this premium is typically between 5% and 10% to account for the longer settlement period.

Related: Cathie Wood’s ARK Invest adds BitMine shares, withdrawing $30 million from Tesla shares

Market anxiety increased after U.S. consumer sentiment expectations fell to an all-time low, according to a University of Michigan survey.

The November reading released on Friday was the second weakest since at least 1978 and was largely attributed to ongoing U.S. government spending cuts, AP reported.

Part of Ether investors’ frustration stems from ETH’s 4% weekly underperformance compared to the broader cryptocurrency market. This suggests that beyond rising macroeconomic risks, other factors have likely made investors more cautious about Ethereum.

The total value locked on the Ethereum network has fallen to $74 billion – the lowest level since July – a decline of 24% in the last 30 days. Investors were caught off guard after one of Ethereum’s leading decentralized finance (DeFi) platforms, Balancer v2, was hit with a $120 million exploit on Monday.

Ethereum DApps revenues declined in October

Ethereum decentralized applications (DApps) generated revenue of $80.7 million in October, down 18% from September. The decline is particularly concerning for ETH holders as lower on-chain activity puts downward pressure on the profitability of native staking.

Ethereum’s design includes a mechanism that burns ETH during periods of high demand for blockchain computing, helping to balance network activity and supply.

However, the first week of November shows early signs of Ethereum’s strength compared to competing blockchains. Lively addresses increased by 5% in the last seven days, while the number of transactions increased by 2%. In turn, both Tron and BNB Chain saw declines in onchain activity.

ETH investor sentiment has been hit by a lack of demand for spot ETFs (ETFs). According to data from the Strategic ETH Reserve, US-listed products recorded net outflows of $507 million in November and there were no significant purchases of ETH corporate reserves.

Currently, the only clear catalyst for ETH is the upcoming Fusaka update, scheduled for early December. The update aims to introduce several improvements to network scalability and security.

However, with derivatives markets signaling weakness and investors fearing a slowdown in the global economy, the chances of a breakout towards $3,900 in the near term appear constrained.

This article is for general information purposes and is not and should not be treated as legal or investment advice. The views, thoughts and opinions expressed here are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.