Ethereum (ETH) social commentary has reached a very bearish level for the third time in a month, according to Santiment, with the previous two low readings coming before ETH price rebounds.

The latest sentiment reading comes as ETH trades near $1,854 and demand for spot exchange-traded funds (ETFs) strengthens. US-listed Ethereum spot ETFs, which began trading in July 2024, have given institutional investors a regulated vehicle for ETH exposure without direct custody. Santiment views broad crowd pessimism as a contrarian indicator rather than a standalone signal for an immediate price reversal.

Ethereum Sentiment Falls to Third Bearish Extreme in a Month

Santiment measured the ratio of positive to negative Ethereum commentary across X, Reddit, Telegram, and other crypto-focused channels. The ratio fell to 1.089 on July 24, marking its third bearish extreme in one month.

The two earlier troughs occurred on June 27 and July 11. After those readings, ETH rose 14% over the following seven days and 7% over the next four days, respectively.

However, Santiment stopped short of saying the latest reading guarantees another reversal.

“The bullish takeaway isn’t that negative sentiment guarantees an instant reversal. It’s that when traders are loudly giving up on Ethereum while ETF flows, L2 activity, and protocol upgrades remain active, the #2 market cap in crypto often gets a cleaner setup for a turn-around…” the firm said.

Ethereum's L2 ecosystem — which includes networks such as Arbitrum, Optimism, and Coinbase's Base that settle transactions on the Ethereum mainnet — has continued to grow as a key driver of protocol-level demand.

Ethereum ETF Inflows and On-Chain Data Strengthen in July

While crowd commentary turned bearish, institutional demand did not show the same pattern. Ethereum ETFs recorded $103.9 million in inflows during the week ending July 24, more than any other spot crypto product. It was the third consecutive positive week, following inflows of $84 million and $105 million.

Other metrics also improved. CryptoQuant said ETH is “undervalued relative to its cost basis.”

“It trades near $1,900 — roughly 17% below its realized price of $2,304 — and in the lower half of its realized price band, a zone historically associated with market bottoms and asymmetric upside,” the firm explained.

Realized price represents the average on-chain cost basis — the price at which every ETH coin held in wallets last moved — making it a widely used gauge of whether the market is trading above or below the network's aggregate acquisition cost.

At the same time, the ETH/BTC exchange inflow ratio is near 0.8, down from above 1.5 in August 2025. Earlier bottoms formed closer to 0.4.

XWIN Research also pointed to Binance reserves as an important signal. Ethereum holdings on Binance have declined from nearly 5 million ETH in mid-2025 to about 3.8 million ETH, leaving fewer coins immediately available for sale.

“While this does not confirm that Ethereum has reached its final bottom, the combination of declining Binance reserves, improving on-chain metrics, and recovering institutional interest suggests that downside risk is gradually diminishing,” the analyst said.

The post added that a continuation of the trend could support relative strength against Bitcoin.