Ethereum (ETH) recently saw a sharp pullback of over 5%, dropping to the $3,816 level amid broader market consolidation and a Bitcoin price correction below $104,000. While spot Ethereum ETFs continue to attract record inflows—surpassing $2.5 billion in net investments—the price of ETH has struggled to maintain momentum above the critical $4,000 mark. This divergence between strong institutional demand and bearish price action has raised questions among investors: Why is Ethereum’s price down despite growing ETF adoption?
ETH Faces Resistance Near $4,000
Despite bullish long-term forecasts predicting new all-time highs near $5,000 or even $6,000, Ethereum has encountered repeated rejection at the $4,000 resistance level. The inability to sustain gains above this psychological threshold has led to increased volatility and short-term selling pressure.
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One contributing factor is the ongoing sell-off by the Ethereum Foundation, which has liquidated portions of its ETH holdings throughout 2024. According to Arkham Intelligence, the foundation recently sold an additional 100 ETH (worth approximately $420,470), bringing its year-to-date sales total to 4,466 ETH—valued at over $12.6 million. While these funds are typically reinvested into ecosystem development, such large transactions can trigger short-term bearish reactions in the market.
Historically, Ethereum co-founder Vitalik Buterin and other core contributors have defended these sales as necessary for funding long-term network upgrades, developer grants, and research initiatives. However, retail traders often interpret them as negative signals during periods of market uncertainty.
Another key influence on recent price action is macroeconomic caution ahead of the FOMC meeting and anticipated Federal Reserve rate decisions. With interest rate policy remaining a major driver of capital flows into risk assets like cryptocurrencies, traders have adopted a wait-and-see approach, leading to tighter price ranges.
Currently, ETH is consolidating between $3,600 and $4,000—a pattern that could precede another 5% retracement before a sustainable reversal takes hold.
At the time of writing, Ethereum’s price stands at $3,843, reflecting a 4.38% decline with a market capitalization of $462 billion. Meanwhile, Coinglass data reveals that 24-hour liquidations have surged to $56 million, with nearly $50 million coming from long positions. A notable example includes the liquidation of 782.48 WETH (~$3.02 million) from a single leveraged long position.
Despite these setbacks, analyst Ali Martinez remains optimistic, suggesting that once ETH breaks above $4,100, a powerful rally could propel it toward $6,000—a potential 50% upside.
Record ETF Inflows Signal Strong Institutional Demand
While price action remains choppy, the fundamentals behind Ethereum’s institutional adoption are strengthening. Spot Ethereum ETFs have recorded record inflows, signaling growing confidence among traditional investors.
BlackRock’s iShares Ether ETF (ETHA) leads the pack, surpassing $3.3 billion in net inflows since inception and marking 13 consecutive days of positive flows totaling $1.5 billion. On a single day, total Ethereum ETF inflows reached $144 million—with BlackRock alone accounting for $134 million. Fidelity’s FETH added $3.9 million, while Grayscale’s mini-Ether ETF (ETH) saw $4.5 million in new investments.
ETF Store President Nate Geraci highlights that despite Grayscale’s Ethereum Trust experiencing a net outflow of $3.5 billion during the same period, the overall trend remains strongly positive due to robust inflows into competing spot ETFs.
This surge in institutional interest underscores Ethereum’s maturing status as a digital asset class. As more regulated investment vehicles become available, long-term holders and asset managers are increasingly allocating capital to Ethereum as part of diversified portfolios.
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Analyst Venturefounder points to the ETH/BTC ratio as a key indicator of relative strength. He identifies 0.036 as a critical support level; a bounce from this zone could reignite bullish momentum and set the stage for a sustained rally.
Frequently Asked Questions (FAQ)
Q: Why is Ethereum price falling if ETF inflows are increasing?
A: Price movements are influenced by multiple factors beyond ETF inflows, including short-term selling pressure (e.g., from the Ethereum Foundation), macroeconomic events (like FOMC meetings), and leveraged trading liquidations. Institutional demand through ETFs reflects long-term confidence but doesn't always offset immediate market volatility.
Q: Are Ethereum Foundation sales bearish for ETH?
A: Not necessarily. While large sales can create short-term downward pressure, they are typically used to fund ecosystem development, grants, and research. These actions support Ethereum’s long-term growth and network improvements.
Q: How do ETF inflows affect Ethereum’s price?
A: Strong inflows increase demand for ETH, especially when funds need to purchase spot ether to back shares. Over time, consistent buying pressure from ETFs can contribute to price appreciation, though short-term effects may be muted by other market forces.
Q: What is the significance of the ETH/BTC ratio?
A: The ETH/BTC ratio measures Ethereum’s performance relative to Bitcoin. A rising ratio indicates outperformance by ETH, while a falling one suggests capital rotation into BTC. A stable or rebounding ratio near 0.036 may signal renewed strength in Ethereum.
Q: Could Ethereum reach $6,000?
A: Some analysts, including Ali Martinez, believe a breakout above $4,100 could unlock a 50% rally toward $6,000. However, this depends on sustained institutional inflows, favorable macro conditions, and reduced leverage in the market.
Q: Is now a good time to buy Ethereum?
A: With ETH consolidating near key support levels and ETF demand rising, many view current prices as a strategic accumulation zone. However, investors should conduct independent research and consider risk tolerance before entering positions.
Core Keywords Integration
The dynamics surrounding Ethereum price, ETF inflows, ETH/BTC ratio, institutional adoption, Ethereum Foundation sales, market consolidation, FOMC impact, and crypto liquidations collectively shape the current narrative for ETH. These keywords reflect both technical and fundamental drivers influencing investor behavior and price action.
As spot Ethereum ETFs gain traction and institutional participation deepens, the long-term outlook for Ethereum remains constructive—even amid short-term volatility. The ongoing balance between foundational selling for development purposes and rising external demand will continue to define ETH’s trajectory through 2025.
For traders and investors alike, understanding these dual forces—on-chain activity and macro-financial trends—is essential for navigating the evolving landscape of digital assets.
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