Retail traders appear to be losing faith in Ethereum, but according to blockchain analytics firm Santiment, that widespread pessimism could actually improve the chances of a market rebound.
In a recent update, Santiment noted that “the crowd has written off Ethereum,” arguing that this level of negativity has historically increased the likelihood of a recovery. The firm observed that social sentiment surrounding ETH has slipped into what it describes as an “extreme fear zone,” driven by months of disappointing performance compared with Bitcoin and several major altcoins.
The recent decline has also been fueled by ongoing criticism directed at the Ethereum Foundation. Debates over the organization’s leadership, strategic priorities, and controversial remarks made by Ethereum co-founder Vitalik Buterin have added to investor uncertainty and deepened bearish sentiment.
Extreme Fear Could Be a Contrarian Signal
Santiment reported that the ratio of positive to negative commentary surrounding Ethereum has fallen to one of its lowest points this year, indicating that pessimistic narratives now dominate crypto discussions across social media platforms.
A similar scenario unfolded in April 2025 when ETH plunged to comparable price levels. At the time, fear, uncertainty, and doubt (FUD) reached extreme levels, with many market participants declaring that “Ethereum is dead.”
Yet the outcome proved very different. Within four months, Ethereum had tripled in value and climbed to a new all-time high.
According to Santiment, Ethereum has historically staged recoveries when social sentiment reaches extreme levels of fear. Markets often move against the consensus view, and when most traders become convinced that prices will continue falling, much of the selling pressure may have already been exhausted.
Profitability Metrics Highlight Market Weakness
On-chain data from Glassnode paints a picture of how significantly Ethereum’s profitability has deteriorated. The analytics firm revealed that the percentage of ETH supply held at gains exceeding three times the purchase price has fallen to just 11%—its lowest level since 2017.
Glassnode noted that Ethereum’s profitability profile has “fundamentally compressed” compared with previous market cycles, reflecting the broader challenges facing investors.
However, Ethereum is not alone in its struggles. The firm also reported that Bitcoin’s supply held at a loss has climbed to a new yearly high of 50%, suggesting that bearish conditions are affecting the broader cryptocurrency market.
ETH Price Outlook
In the near term, Ethereum remains under pressure. ETH slipped to an intraday low of $1,620 twice within the past 24 hours, highlighting the market’s continued weakness.
With few catalysts to spark renewed momentum, a further decline toward the $1,500 level appears increasingly possible. This price zone served as a major support area roughly 14 months ago, during another difficult period for Ethereum, and could once again become a critical level for traders to watch.#crypto#cryptonews https://coinsignals.net https://t.me/coinsignalpublic
