ETH price hits $3.4K, but pro traders are not bullish yet: Here’s why

Ethereum (ETH) recently crossed the psychological threshold of $3,400, reaching its highest valuation since April 2022. This rally has been primarily driven by anticipation of the upcoming Dencun upgrade and sustained institutional interest, yet a deep dive into derivatives markets suggests that professional traders are maintaining a cautious or outright neutral stance, resisting the urge to turn overtly bullish.

The primary reason for this hesitation lies in three key indicators of market structure and leveraged sentiment.

Firstly, the ETH futures premium, or basis, on fixed-month contracts remains relatively subdued. While the price has soared, the basis for three-month futures has not dramatically exceeded the 8% annualized threshold. In robust, institutionally-backed rallies, the basis often spikes above 10% as sophisticated traders pay a high premium to secure leveraged long exposure. The current moderate premium suggests professionals are unwilling to pay aggressively for the upside potential, indicating caution regarding the long-term sustainability of the price action.

Secondly, the perpetual futures funding rate, which dictates who pays whom among leveraged traders, remains moderately positive but far from overheated. A high, sustained funding rate signals rampant retail FOMO and aggressive over-leveraging. The current stability suggests that leveraged demand is balanced, with short sellers actively preventing the market from turning parabolic. Professional traders view an overheated funding rate as a reliable indicator of an imminent local peak, and the lack of such heat suggests they are not yet comfortable committing significant capital to aggressive longs.

Finally, the long-to-short ratio among top traders across major exchanges shows a largely neutral or sometimes inverted sentiment. While retail traders may be chasing the spot rally, high-volume accounts are either maintaining neutral leverage or actively hedging their positions, unwilling to bet unilaterally on a sustained breakout above current resistance levels. Until these derivatives metrics reflect strong, conviction-based leveraging, professional money will likely wait for clearer confirmation of the rally’s continuation.

Source: ETH price hits $3.4K, but pro traders are not bullish yet: Here’s why