Ethereum News Today: Institutions Diversify Holdings as Ethereum Tumbles to 36th

Ethereum's market capitalization fell below $400 billion on November 5, marking a significant decline for the second-largest cryptocurrency and pushing it to the 36th position in global mainstream asset rankings, according to Lookonchain. The drop comes amid widespread liquidations, ETF outflows, and shifting institutional strategies, signaling a deepening bearish sentiment across the crypto market.

The price of Ethereum (ETH) has fallen below $3,400, officially turning negative for the year after starting 2025 near $3,353, according to a BeInCrypto report. Over the past 24 hours, more than $1.1 billion in crypto liquidations were triggered, with Ethereum and Bitcoin (BTC) accounting for the bulk of the forced exits. Over 303,000 traders were liquidated, and $287 million in long positions were wiped out in a single hour, highlighting the aggressive deleveraging across exchanges. Bitcoin, meanwhile, slid to an intraday low of $100,721, nearing the psychologically significant $100,000 support level.

The selloff has been exacerbated by outflows from Bitcoin and Ethereum ETFs. U.S. spot Bitcoin ETFs recorded $1.15 billion in withdrawals last week, with BlackRock's IBIT alone responsible for $186.51 million in redemptions on November 3, according to a Crypto.News report. Ethereum ETFs also faced heavy outflows, with BlackRock's ETHA leading the exodus at $81.7 million. Cumulative outflows for Ethereum ETFs now exceed $499 million, reflecting a broad loss of confidence among institutional investors.

Market analysts point to macroeconomic factors and regulatory uncertainty as key drivers of the downturn. The Federal Reserve's recent signal that additional rate cuts are not guaranteed has strengthened the U.S. dollar and dampened crypto demand, according to a CoinPedia article. Meanwhile, retail and institutional investors are shifting to safer assets, with Bitcoin's dominance rising to 60.15% as altcoins face steeper declines. Solana (SOL), BNB, and XRP all fell more than 4% in a single day.

Institutional moves are further pressuring Ethereum's market cap. BlackRock and Securitize have diversified their tokenized fund BUIDL across blockchains like Aptos, Polygon, and Avalanche, reducing Ethereum's share of the fund by 60%, according to The Defiant. This strategic shift, which saw holdings on Ethereum drop from $2.4 billion to $990 million, underscores a broader trend of blockchain diversification among major players.

Technical indicators also suggest prolonged weakness. Ethereum's futures open interest has fallen to $44.72 billion from a peak of $63 billion in October, while the OI-weighted funding rate remains near oversold levels, per an FXStreet forecast. Analysts warn that if Bitcoin breaks below $106,000, another $6 billion in liquidations could follow.

The decline has sparked dire predictions from market observers. Crypto analyst Ali Martinez posits a "worst-case scenario" for Ethereum, forecasting a potential drop to $1,700 by mid-2026 if the asset fails to reclaim key support levels, as reported by Yahoo Finance. Despite the bearish outlook, Ethereum's 12-month trailing gain of 30% offers a contrast to its recent struggles.

The broader crypto market now faces a critical juncture. With over $1.37 billion in liquidations recorded in the past 24 hours and ETF outflows persisting, the path to recovery remains uncertain, as noted in the Crypto.News coverage. For Ethereum, the challenge will be to regain buyer interest amid a landscape increasingly dominated by regulatory scrutiny and macroeconomic headwinds.