The Ethereum Ether cryptocurrency (ETH) has dramatically dropped in the past week, falling 7% at the time of writing. While the asset remains up over 30% in the last 30 days, the sudden drop-off certainly concerns investors. Further upside in ETH price appears unlikely due to weak network activity and rising competition among other coins.

Ethereum has several factors contributing to its dip. Total deposits on the Ethereum network, measured by total value locked (TVL), fell to 25.1 million ETH on June 5, marking a 17% decline from the previous month. Key contributors to Ethereum’s TVL decline include Sky (formerly MakerDAO), which dropped 48% to 2.1 million ETH, and Curve Finance, down 24% to 1.1 million ETH. Currently, rival coins Bitcoin and Solana SOL are performing better, causing investors to look away from ETH.

Additionally, as of June 5, the Ether futures premium dropped to 5%, down from 6% last week. This signals a slight reduction in leveraged long positions, though the premium remains within a neutral range. The last time ETH futures traded above a 10% premium was in late January, suggesting a consistent lack of bullish conviction among investors.

Also Read: BlackRock Sold Bitcoin And Bought Ethereum: Should You Too?

On the other hand, ETH began to rally in early May after the commencement of the Pectra update. The upgrade may have triggered a spike in investor confidence. ETH registered double-digit percentage growth in the daily charts at one point. Furthermore, institutional interest in ETH has grown, reinforcing support near the $2,500 level. It is possible that investors anticipate ETH’s price to rally over the coming weeks despite this week’s dip.

While demand for ETH remains, particularly from institutions, other metrics suggest that the bulls will probably be unable to break $3,000 in the near term. Analysts at CoinCodex note the same thing, but suggest that this dip is a good time to buy Ethereum. “According to our current Ethereum price prediction, the price of Ethereum is predicted to rise by 7.32% and reach $ 2,755.50 by July 4, 2025.” Come the middle of July, CoinCodex suggests that then we will see ETH reclaim and surge beyond the $3K level.