Santiment forecasts that Ether may soon retest the $3,200 level as current stablecoin yields suggest the crypto market is far from overheated. The on chain analytics platform stated that yields remain subdued which historically indicates room for upward movement rather than an imminent market top.

Stablecoin Yields Signal Market Is Not Overheated

Santiment reported that yields on major lending platforms are averaging close to 3.9% to 4.5%. The platform highlighted that yields near 4% indicate a healthy market. Periods of unusually high yields generally point to increased speculative leverage which often precedes major corrections. With present yields still muted Santiment believes Ether is positioned for a near term rise of almost seven percent.

At the time of the report Ether was trading near $2,991 according to CoinMarketCap. A move back to $3,200 would place the asset close to its key resistance level that has repeatedly capped rallies.

Ether Begins Recovering After Broad Market Decline

Ether has struggled over recent weeks with the token falling more than 21% in the past month. The decline was part of a wider market pullback that followed the large scale $19 billion liquidation event on 10 October. The downturn intensified shortly after the announcement by US President Donald Trump regarding tariffs of one hundred percent on Chinese goods.

Momentum indicators are now beginning to show early signs of a reversal. Analyst Matthew Hyland noted that the ETH BTC weekly chart is nearing a bullish ribbon flip for the first time since July 2020 which signals potential strength relative to Bitcoin.

Spot Ether ETFs Return to Positive Inflows

Spot Ether exchange traded funds have also begun to show signs of renewed investor confidence. The products recorded net weekly inflows of $312.6 million after three consecutive weeks of heavy outflows. The shift marks a meaningful change in demand that supports the broader recovery narrative.

Market Sentiment Shows Signs of Stabilising

Across the market sentiment indicators are starting to improve. The Crypto Fear and Greed Index spent most of November in extreme fear yet has moved up to a fear reading as of Saturday. Analysts view this as an early signal of stabilisation following weeks of volatility.

December has historically delivered an average return of 6.85% for Ether according to CoinGlass. However several analysts cautioned that traditional seasonal trends have been less reliable this year. Bitcoin typically performs strongly in October and November although both months underperformed in 2024 which has raised questions regarding the strength of historical patterns.

Outlook for Ether Remains Constructive

Based on current yields Santiment maintains that conditions are supportive of a continued recovery. The platform stated that the lack of elevated stablecoin rates suggests speculative activity is still contained. If market sentiment continues to improve over the coming weeks Ether may soon reclaim the $3,200 level which would mark a near seven percent rise from prices at the time of the report.