Ethereum News Today: Institutional caution ahead of Powell's Jackson Hole speech sends ETH ETFs bleeding $200M

Institutions have poured nearly $200 million out of U.S. spot Ethereum (ETH) exchange-traded funds (ETFs) in recent trading sessions, signaling a shift in investor sentiment amid rising macroeconomic uncertainty and short-term volatility. The outflows, the second-largest since the launch of ETH ETFs last July, highlight growing caution among institutional investors ahead of the upcoming Jackson Hole Economic Symposium, where Federal Reserve Chair Jerome Powell will deliver a speech expected to influence market direction.

According to data from SoSoValue, the net outflows occurred amid a broader decline in Ethereum’s price, which fell below $4,200 earlier this week. The drop followed heightened activity in short-term volatility metrics, record validator queue exits, and a continued bearish shift in technical indicators. Validator queue exits, which represent the number of ETH tokens waiting to leave the network, reached 927,000 ETH, a record high that may contribute to bearish sentiment on-chain.

The market reaction is also being shaped by the broader macroeconomic environment. The U.S. Producer Price Index (PPI) inflation data for July sparked a reevaluation of expectations for a September Federal Open Market Committee (FOMC) rate cut, with probabilities slipping below 90%. As a result, traders are bracing for potential hawkish commentary from Powell, which could exacerbate downward pressure on both Bitcoin (BTC) and ETH.

Nick Forster, founder of crypto options platform Derive, noted in a recent analysis that the elevated 7-day implied volatility for ETH has risen to 73%, signaling anticipated volatility in the near term. “Markets expect heightened volatility in the immediate term,” he stated, with the probability of ETH dropping to $4,000 by the end of September now at 60%.

Technical indicators for Ethereum are also showing signs of bearish momentum. The 14-day Exponential Moving Average (EMA) has been breached, and the Relative Strength Index (RSI) and Stochastic Oscillator are nearing neutral levels, suggesting a potential trend shift. The Moving Average Convergence Divergence (MACD) has crossed below its signal line, with histogram bars turning red—another bearish sign. A sustained move below key support levels, including $4,100 and $4,000, could send the price toward $3,500.

Despite these short-term challenges, Ethereum’s long-term fundamentals remain intact. The network’s dominance over other altcoins is still strong, and the broader crypto market continues to show interest in Ethereum-based products, including ETFs. According to data from The Block, Ethereum ETFs currently hold approximately 5% of the total ETH supply, reflecting sustained institutional interest. However, recent outflows suggest a temporary shift in strategy as investors reposition ahead of macroeconomic events.

The Ethereum price also faces pressure from broader market dynamics, including a recent decline in ETH-to-BTC exchange rates and a drop in Ethereum’s market dominance. These metrics suggest that Ethereum could underperform Bitcoin in the near term, potentially ceding market share during a correction phase.

While the immediate outlook for Ethereum is bearish, long-term investors remain cautiously optimistic. A rebound above $4,500 could signal a reversal of the current trend and provide a pathway for Ethereum to test its all-time high of $4,868. However, for that to occur, the asset must first stabilize near current support levels and demonstrate renewed buying interest from both retail and institutional participants.

Source:

[1] Ethereum Price Forecast: ETH plunges below ... (https://www.mitrade.com/insights/news/live-news/article-3-1052176-20250820)

[2] Ethereum Price Stumbles: Why ETH Could Slide Before Its ... (https://www.ccn.com/analysis/crypto/ethereum-price-stumble-eth-fall/)

[3] ethereum, eth, ether currency price (https://www.coinbase.com/price/ethereum)