[Digital Today reporter Yoonseo Lee (이윤서)] Ethereum tested the $1,950 level for the first time in seven weeks, extending a short-term rebound.

On July 21 (local time), blockchain media outlet Cointelegraph reported that the rise triggered $62 million of liquidations in leveraged short positions.

Ethereum rose 29 percent from its June 26 low of $1,500 overnight. With bitcoin above $66,500, the move tracked a broader recovery in risk appetite across the crypto market. Market attention is focused on whether Ethereum can extend gains to the $2,100 level.

But Ethereum’s underlying indicators are still not strong. Demand for blockchain processing has not returned to levels seen six months ago, and traders’ interest in memecoins and utility tokens has also weakened. Some major Ethereum-based projects, including Ethena, Mantle and Arbitrum, are down more than 50 percent from the start of the year.

Network revenue and trading volume are also weak. Weekly revenue for Ethereum-based decentralised applications, or DApps, fell to $9.8 million, the lowest level since September 2024. Over the same period, weekly revenue at Sky, formerly MakerDAO, was $3.2 million, while Chainlink posted $1.2 million. Weekly trading volume at decentralised exchanges, or DEXs, also fell to $7.2 billion.

This weak on-chain trend is also reflected in derivatives. The annualised funding rate for Ethereum perpetual futures has not consistently held the neutral range of 6 to 12 percent over the past month. Still, investor sentiment has partly recovered compared with late June, when rates were in negative territory. Back then, demand for downside exposure was strong, but recently expanding demand for staking has been cited as a factor reducing downside risk.

Staking’s share has climbed to a record high. Based on staking rewards calculations, 34 percent of total Ethereum supply is staked, up from 33 percent a month earlier. Expectations have also emerged that selling pressure could ease as long-term holders continue to absorb supply.

In this process, Tom Lee (톰 리)'s BitMine bought an additional 156,719 ETH over the past month. The company’s holdings are now about 4.8 percent of the circulating supply. The market views this accumulation trend as potentially positive for supply and demand over the long term.

Even so, expectations for a renewed rally have not fully returned. Ethereum is still 61 percent below its all-time high recorded in August 2025, and bullish sentiment in derivatives remains limited due to a downturn over the past six months and weak on-chain indicators. Perpetual futures funding rates remaining outside the neutral range is read as a sign that bulls still lack conviction.

Potential drivers are also emerging outside the crypto market. As U.S. stocks rose on July 21, concerns about overvaluation that surfaced after a surge in artificial intelligence-related shares eased somewhat. After U.S. conglomerate 3M released earnings that day, Alphabet is due to report quarterly results after the close on July 22. Investors are watching whether cloud services revenue grew 64 percent and the company’s forward sales guidance.

Ultimately, a view is emerging that Ethereum’s next upside phase will depend not only on expanded staking, but also on whether on-chain indicators improve and risk appetite continues to recover.