Ethereum Faces Price Correction Risk as Institutional Inflows Stall

Ethereum (ETH) is currently at a pivotal moment, with both institutional and retail investor activities shaping its potential trajectory in the coming days. Recent data indicates that institutional inflows have stalled, a pattern reminiscent of previous bearish market conditions. This pause in institutional buying has raised concerns about a potential price correction for ETH. A COINOTAG analyst commented that the current situation mirrors events leading to significant price corrections in the past.

Historical data reveals that slight accumulation phases by institutions, such as the recent purchase of 14,570 ETH, have often preceded substantial sell-offs. For example, in February, after institutions bought 8,790 ETH, they subsequently sold 146,950 ETH. A similar pattern was observed in late March, where a purchase of 5,890 ETH was followed by a sell-off of 28,950 ETH. These historical patterns suggest that the current landscape may foreshadow another price correction for ETH.

Despite the institutional hesitation, ETH accumulation has surged, particularly among U.S. investors. In the last week, the Exchange Netflow showed robust buying activity, with investors acquiring $380 million worth of ETH. The Coinbase Premium Index, which remains above zero at 0.042, indicates heightened demand among U.S. investors. If this purchasing pattern persists, the market may witness a significant rally for ETH. However, the funding market premium remains negative at -0.6, suggesting a prevailing bearish sentiment among fund investors. Should this selling pressure amplify, Ethereum may face additional challenges in maintaining its price levels.

In summary, Ethereum stands at a critical crossroad. While institutional inflows have stalled, retail accumulation is robust. The market’s reaction in the coming days will be pivotal in determining ETH’s direction, underscoring the importance of monitoring these trends closely. The current market conditions, characterized by regulatory uncertainties and stalled institutional inflows, may influence the trajectory of ETH prices in the short term. Investors and traders are advised to closely monitor market developments and regulatory changes, as these could significantly impact the trajectory of ETH prices.