New data suggests that Ethereum is increasingly being viewed as “dead money” amid weak price action, ETF outflows, and rising social frustration.
Ethereum (ETH) has shed nearly 30% of its market value so far this year. Despite numerous recovery attempts, its market performance throughout May remained weak. Growing fear and frustration around the asset have become increasingly visible across social media and market activity.
According to Santiment, the downturn has not been driven by a single major negative event, but rather by several bearish narratives building at the same time.
Bearish Narratives Spiral
One of the clearest signs highlighted by the firm was the rise in Ethereum’s social dominance even as prices continued falling. While higher social dominance can often signal strong bullish attention during rallies, Santiment noted that Ethereum’s discussion volume surged after its April 17 local top precisely when the asset began losing momentum.
Instead of conversations centered around optimism or new highs, social media discussions were increasingly focused on disappointment, frustration, and concerns about further downside. Santiment also flagged a steady deterioration in sentiment ratios on social media platforms.
During late April, Ethereum maintained relatively strong sentiment levels, as it recorded more than two bullish comments for every bearish one. However, that ratio gradually declined throughout May until bullish and bearish commentary became nearly equal. The firm said this kind of sentiment erosion typically indicates weakening trader confidence in an asset’s short-term outlook.
Ethereum’s weak price performance itself has been one of the biggest contributors to the negative mood. Many traders have increasingly viewed ETH as “dead money” compared to assets that have shown stronger momentum during 2026, Santiment said in its latest post.
While Bitcoin has continued attracting institutional confidence and newer ecosystems have drawn speculative interest, Ethereum has struggled to regain the market leadership role it held in previous cycles. ETF flows also added to bearish sentiment. Several Ethereum exchange-traded funds reportedly recorded continued outflows throughout May, including significant withdrawals from BlackRock-related funds.
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Santiment added that days with more than $50 million in net inflows, once relatively common for Ethereum ETFs, have not occurred for almost three weeks. Although ETF flows often follow sentiment rather than predict it, retail traders frequently interpret outflows as evidence that institutions are losing confidence in the asset, which further adds to fears already created by falling prices.
Negative headlines surrounding the Ethereum Foundation also contributed to the change in market mood. Reports about researcher departures and ongoing exits from the ecosystem spread widely across social media. Many traders see them as signs of instability within Ethereum’s leadership and development community.
At the same time, viral rumors claiming prominent Ethereum figures, such as David Hoffman, were reducing or exiting their ETH holdings further fueled uncertainty, even when some reports lacked full context. Santiment said such narratives can spread rapidly in crypto markets, especially when traders begin fearing that insiders are abandoning positions before the broader market reacts.
Contrarian Setup?
Competition from other blockchain ecosystems has also intensified pressure on Ethereum’s reputation. Data showed Ethereum still leads the crypto industry in raw development activity, as it generates millions of GitHub events and maintains one of the largest developer communities in the sector.
However, retail traders have increasingly prioritized short-term price performance over long-term development strength, while ecosystems such as Solana and BNB Chain continue to attract speculative enthusiasm. On-chain activity has weakened as well, with both daily active addresses and network growth declining from the high levels seen during Ethereum’s strongest rallies in 2024 and 2025.
Despite the overwhelmingly bearish environment, the firm said extreme pessimism can sometimes point to exhaustion among traders and potentially emerge near major market turning points.
“Growing bearishness may eventually become constructive from a contrarian perspective. Historically, markets tend to punish the crowd when consensus becomes too one-sided. Ethereum is now reaching a point where social media discussion has become overwhelmingly focused on reasons to abandon the asset. “
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