Ethereum rebounds from $1,700, but weak buying keeps bulls on edge

Ethereum has gradually recovered from weeks of sustained selling pressure, climbing nearly 10% since the beginning of the month.

However, the rebound has yet to attract the strong buying activity needed to confirm a broader bullish trend.

On-chain metrics suggest investor sentiment is improving, but demand from both retail traders and institutional participants remains relatively subdued, limiting the cryptocurrency's upside potential.

NUPL shows investors are still underwater

Ethereum's Net Unrealized Profit/Loss (NUPL) indicator has improved from -0.46 to -0.30, reflecting that recent price gains have reduced paper losses for many holders.

However, the metric remains in negative territory, indicating that the average investor is still holding ETH at a loss.

A stronger price rally backed by sustained buying volume would be required to push the NUPL into positive territory, signaling that a larger portion of investors has returned to profitability.

Large Ethereum holders have shown renewed interest over the past week.

Wallets holding between 10,000 and 100,000 ETH accumulated approximately 100,000 ETH during the period.

Despite the recent purchases, whale balances have remained relatively unchanged over the past three weeks, suggesting accumulation has been measured rather than aggressive.

Retail participation continues to lag.

Addresses holding between 100–1,000 ETH and 1,000–10,000 ETH recorded only minimal changes in their balances, indicating that smaller investors have largely stayed on the sidelines despite Ethereum's recent recovery.

Institutional demand has also shown signs of improvement.

According to CoinGlass data, US spot Ethereum exchange-traded funds (ETFs) have recorded four consecutive trading days of net inflows, marking the longest positive streak since early May.

The combined inflows totaled approximately $91.5 million.

While the return of positive ETF flows is encouraging, the amount remains relatively modest and has not been sufficient to drive a significant upward move in Ethereum's price.

Another indicator pointing to cautious market sentiment is the Coinbase Premium Index, which tracks buying activity among U.S.-based investors.

The metric has recovered from -0.169 to -0.076, suggesting demand has improved compared with previous weeks.

However, the index remains below zero, indicating buying pressure is still weaker than normal.

Historically, Ethereum has tended to experience stronger rallies when both the Coinbase Premium Index and spot ETF inflows remain elevated for extended periods.

Finally, activity in Ethereum's derivatives market also reflects a cautious outlook.

Open interest has remained largely unchanged over the past week, suggesting leveraged traders are waiting for stronger confirmation before increasing their market exposure.

The lack of fresh capital entering derivatives markets indicates that recent price gains have yet to convince traders that a sustained bullish trend is underway.

Ethereum technical analysis: Key levels to watch

The ETH/USD 4-hour chart is bearish as Ethereum continues to face resistance after failing to reclaim key moving averages.

The cryptocurrency remains below both the 50-day Exponential Moving Average (EMA) at $1,803 and the 100-day EMA at $1,965

However, ETH defended the 20-day EMA near $1,714 on Wednesday, and it now serves as immediate support.

Momentum indicators also suggest buying pressure is beginning to weaken.

The Relative Strength Index (RSI) is drifting toward the neutral 50 level, while the Stochastic Oscillator has also turned lower, indicating bullish momentum may be fading.

If selling pressure increases, traders may watch the following first major support level at $1,714.

A daily candle close below this level could expose lower demand zones at $1,524, $1,404, and $1,155 (major long-term support). 

For Ethereum to extend its recovery, bulls will need to overcome several key resistance areas, the first of which lies at $1,803. 

Breaking this resistance would allow ETH to extend its rally towards $1,965 (100-day EMA), with another supply zone above the $2,000 psychological level.