Ether.Fi [ETHFI] has moved lower, with the token declining 9% as bearish pressure continued to build. The decline came even as several protocol-level indicators remained comparatively strong, creating a contrast between market performance and underlying activity.

One notable factor in the move was a decline in market sentiment to -6, according to the chart cited in the source. The metric reflects aggregated investor votes and indicates that the market is leaning strongly bearish. Community sentiment is measured on a scale from -10 to 10, placing the latest reading close to the extreme bearish end of the range.

Market data also pointed to some selling pressure among holders. The number of ETHFI holders slipped from 132,070 to 132,040. While the decline was small in absolute terms, the source noted that it could indicate larger holders reducing exposure rather than a broad exit by retail participants. Holder-count changes are often read alongside price action and exchange-flow data because they do not, on their own, show the size or intent of individual transactions.

The selling may also be linked to holders not yet receiving a payout this quarter. That differs from Q1 2026, when the EtherFi protocol distributed $3.06 million to holders.

EtherFi protocol remains profitable

EtherFi has continued to generate revenue, with the protocol producing $2.39 million so far this month, 25 days into the quarter. The figure points to continued fee generation and active use of the protocol.

The source also cited a chart showing that protocol fees have continued to rise, reaching roughly $390,000. That steady increase was presented as evidence of ongoing utility within the EtherFi ecosystem.

Total value locked, or TVL, also showed notable inflows. TVL measures the value of tokens deposited into a protocol, and roughly $201 million was added over about five days. The data indicates that users have continued depositing assets into EtherFi despite the decline in ETHFI’s market price. In DeFi, TVL is commonly used as a measure of protocol liquidity and user participation, although it can move because of both new deposits and changes in the value of deposited assets.

Spot and perpetual market activity remains active

Activity in ETHFI spot and perpetual markets remained firm, with participation continuing across both segments.

In the spot market, netflow data — the difference between inflows and outflows — showed that more investors were buying and moving assets away from exchanges. About $2.82 million moved into private wallets after purchase, pushing netflow to negative $192,480 at the time of writing. Negative exchange netflow can indicate reduced immediate sell-side supply on trading venues, but it does not confirm whether holders intend to keep assets off exchanges for the long term.

In the perpetual market, the Funding Rate remained positive even as open interest declined. Open interest fell by more than 9% to $78 million, reflecting a reduction in capital committed to open positions.

The Funding Rate is used to assess which side of the perpetual market is more dominant, long or short. The current positive reading showed that long contracts were dominant at the time. A positive Funding Rate often indicates that more capital is being allocated to long positions than short positions. The combination of positive funding and lower open interest suggests that directional positioning remained long-leaning even as overall leveraged exposure declined.

EtherFi’s 9% token decline therefore coincided with sentiment falling to -6, a small reduction in holder count, and the absence of a payout so far this quarter. At the same time, the protocol recorded $2.39 million in quarterly fees so far and about $201 million in fresh TVL over five days, while spot outflows to private wallets and a positive Funding Rate showed continued activity across markets.