Ether slipped below the $2,000 mark on Thursday as selling pressure intensified, even as futures market activity surged to record levels — a divergence that signals increasing bearish positioning.

The asset has been weighed down by a broader risk-off sentiment, declining nearly 8% over the past week and more than 5% in the last 24 hours. The move marks ETH’s first drop below $2,000 since late March, according to CoinDesk data.

Demand for ether appears to be softening. Markus Thielen, founder of 10x Research, said the asset is struggling to attract buyers, citing its limited revenue generation and less attractive staking yields in a higher interest-rate environment. He also pointed out that Bitmine, a notable source of demand, is expected to reduce its pace of purchases.

In contrast, derivatives markets are showing heightened activity. Open interest in ether futures has risen for three consecutive days, reaching a record 16.39 million ETH, or approximately $32.5 billion in notional value, according to Coinglass. The increase reflects a growing build-up of leveraged positions.

However, the combination of rising open interest, declining spot prices, and a negative seven-day open interest-adjusted cumulative volume delta (CVD) indicates that the positioning is skewed toward aggressive short selling. A negative CVD suggests traders are actively entering bearish positions via market orders.

Institutional flows reinforce this trend. U.S.-listed spot Ether ETFs have recorded $401 million in net outflows this month, reversing April’s $354 million in inflows, based on SoSoValue data.

Sentiment has also been impacted by developments within the Ethereum ecosystem. The Ethereum Foundation has seen notable departures, including contributors Carl Beekhuizen and Julian Ma, raising concerns about the project’s long-term direction.

Thielen noted that such exits may reflect a broader shift in confidence, suggesting that Ethereum’s original vision is losing resonance among some early participants.

The reassessment extends to prominent figures in the space. David Hoffman, co-founder of Bankless, recently revealed that he has exited his ETH position, arguing that the long-standing “ETH as money” narrative may have largely played out.

Analysts are also questioning how effectively Ethereum’s dominance in decentralized finance and tokenization translates into sustained value for its native token.

“Ethereum’s infrastructure remains strong, but the market is re-evaluating how that strength is reflected in ETH,” Web3 research firm House of Chimera said in a post on X.

While Ethereum continues to lead in developer activity, with millions of GitHub contributions, analysts caution that strong fundamentals do not always translate into near-term price strength or positive sentiment.