Amid shrinking liquidity and weak on-chain activity, ETHFI price has fluctuated widely. Ether.fi’s daily user count dropped to 328 as fees fell by nearly $98,000. If the $0.96 support level cannot be sustained, the price risks further deepening.
Prior to the sharp recovery, Ether.fi’s native token, ETHFI, has fallen significantly over the past few days starting today as liquidity thins and on-chain engagement drops to multi-month lows.
Market analysis and protocol indicators currently indicate that the short-term setup is vulnerable, with technical losses further raising concerns about future token supply and holder income declines.
Altcoin decline impacts ETHFI
Risk aversion in the broader crypto market amplified the decline in ETHFI.
ETHFI (a high-beta staking play) has underperformed large-cap stocks as traders flee speculative tokens.
The token fell more than 7.1%, hitting a low of $0.9997 before recovering. $1.11 at time of writingbroader altcoin benchmarks have shown smaller declines, highlighting project-specific pressures.
In particular, the market rotation towards Bitcoin (BTC) has intensified the outflow from small tokens.
For example, ETHFI’s 30-day decline of approximately 33% indicates continued selling pressure rather than a one-day repricing event.
Investors are treating tokens like a leverage play and exiting as soon as macro and micro signals turn negative.
Losses increase due to technical failure
From a technical perspective, ETHFI fell below the intermediate retracement of $1.15 and tested the 61.8% Fibonacci level of $0.96, erasing early attempts at recovery and shattering market confidence.
Additionally, the RSI is near neutral but trending downward, the MACD histogram still shows bearish momentum but there are signs of a possible reversal, and rising volume during the decline indicates seller confidence.
Algorithms and short-term traders rely on these technical thresholds, so breaking through these levels often accelerates the downward movement, and that seems to have happened here.
A close below the $0.96 area would open the door to a retest of the September low of $0.80.
On-chain metrics paint a grim picture
On-chain data confirms the price weakness, with daily active addresses plummeting to 966, the lowest since July 2025, indicating a clear decline in buyer and user interest.
Protocol fees have also plummeted from approximately $210,500 to approximately $111,700, a drop of more than $98,000 directly impacting net holder income and making yields less attractive for stakers.
Liquidity has also been depleted to near-year lows, with available DEX liquidity at approximately $680,000.
This thinness magnifies price fluctuations, as even modest sell orders push the market further up.
According to DefiLlama, TVL is contracted to around $9.784 billion, highlighting the fading long-term commitment to the protocol.
Tokenomics overhang remains important
Supply dynamics remain a structural risk for ETHFI holders as well.
With approximately 56% of total supply in circulation, the upcoming unlock schedule keeps potential dilution in the minds of investors.
Concerns about future supply increases could prompt pre-emptive sales based on upcoming large-scale unlock events, mirroring events seen with similar projects.
Net income for holders has also declined significantly quarter-over-quarter, with NHI in the fourth quarter at nearly $464,000 compared to $3.9 million in the third quarter, indicating a significant decline in protocol income that reduces the incentive to accumulate and hold.
Unless usage and fee generation improve, economics for holders will remain difficult.
ETHFI price outlook
Until we see concrete signs of recovery, the immediate outlook is likely to be biased to the downside.
The key technical support near $0.96 needs to hold to maintain the potential for a short-covering rebound.
If this level fails, ETHFI could revisit the $0.80 area where buyers were previously defending the token.
Recovery depends on two things: updating activity on the chain and restoring liquidity.
A return to daily users and a restoration of fees would stabilize NHI and improve the token’s narrative, while meaningful liquidity replenishment would reduce volatility and aid price discovery.
Until these changes materialize, traders should expect higher swings and the possibility of further erosion.
