Ether May Rise 7% as Decreased Stablecoin Returns Indicate Potential Growth: Santiment

Ether might be on the verge of a short-term recovery, with onchain analytics indicating that the market has not yet entered overheated territory, as reported by crypto analytics platform Santiment.

Key Takeaways:

• Santiment notes that low stablecoin yields indicate the crypto market is not overheated, and Ether could approach the $3,200 mark.
• Yield figures ranging from 3.9% to 4.5% imply that leverage remains low, decreasing the likelihood of an imminent market peak.
• Technical indicators and $312.6 million in Ether ETF inflows suggest a resurgence of confidence following a significant recent downturn.

In a report released on Saturday, the firm stated that subdued stablecoin yields indicate potential for further price increases, with Ether possibly revisiting the crucial $3,200 level.

“At present, yields are low, around 4%. This suggests the market has not hit a significant peak and could still advance,” Santiment remarked, highlighting that Ether was trading near $3,001 at the time of the report.

This target suggests an increase of nearly 7% from recent values around $2,990, according to CoinMarketCap data.

Low Stablecoin Yields Indicate Crypto Market Isn’t Overheated

Santiment monitors yields from leading crypto lending platforms, where interest rates often reflect the level of leverage entering the market.

The firm reports that stablecoin returns are currently between 3.9% and 4.5%, a range that indicates borrowing demand remains low.

Historically, increases in yields have been associated with speculative excess and trend reversals, making today’s relatively low levels a sign that risk-taking is still cautious.

This perspective follows a challenging month for Ether, which fell over 21% in the last 30 days as part of a wider digital asset decline.

The downturn intensified after a significant $19 billion liquidation event on October 10, which was exacerbated by renewed trade uncertainty following US President Donald Trump’s announcement of extensive tariffs on Chinese imports.

https://twitter.com/santimentfeed/status/1994468121982148872?s=20

Technical indicators are also beginning to show positive signs.

Crypto analyst Matthew Hyland noted that the ETH–BTC weekly chart is nearing a “bullish ribbon flip” for the first time since mid-2020, a signal that in previous cycles has indicated the onset of extended outperformance against Bitcoin.

Inflows into exchange-traded products are contributing to the shift in sentiment.

Spot Ether ETFs reversed their trend this week, attracting $312.6 million in net inflows after three weeks of consistent withdrawals, indicating renewed interest from institutional investors.

Santiment Improves as Sell-Off Eases

Market sentiment is also on the rise.

The Crypto Fear & Greed Index, which spent 18 days in “extreme fear” in November, has recently moved back into the “fear” category, suggesting that panic-driven selling may be subsiding.

Seasonal trends may also play a role. December has historically yielded an average return of nearly 7% for Ether since 2013, according to CoinGlass.

However, with both October and November underperforming typical patterns this year, traders remain wary of relying solely on historical trends.

As previously reported, ARK Invest CEO Cathie Wood has predicted that the liquidity crunch affecting crypto and AI markets will reverse within weeks, driven by three anticipated Federal Reserve policy changes before the year concludes.

Her firm continues to actively purchase crypto equities during the downturn, investing over $93 million in a single day this week across undervalued digital asset stocks.

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