Ethereum’s 20% Crash Leads to Highest ETF Inflows in Two Months

Ethereum price has seen a significant downturn, plunging to an eight-week low of $2,600. The sharp decline has resulted in heavy losses for ETH holders. 

However, institutional investors view this as a buying opportunity, capitalizing on lower prices in anticipation of a potential market recovery.  

Ethereum Losses Momentum

Ethereum’s supply in profit has dropped sharply, declining by 32% over the past two months. Previously, 97% of ETH holders were in profit, but this figure has now fallen to just 65%.

The decline has fueled a negative sentiment among traders, with Ethereum underperforming compared to other large-cap cryptocurrencies.  

Fear, uncertainty, and doubt (FUD) have led to retail investors selling their holdings, contributing to further downside pressure. However, market cycles often lead to unexpected reversals. If the broader crypto market stabilizes, ETH could see surprise bounces as long-term investors take advantage of discounted prices.  

Ethereum Supply In Profit. Source:  Santiment

Despite Ethereum’s price decline, institutional investors appear to be accumulating the asset. The US spot Ethereum ETF market recorded its highest single-day inflow in two months, with 89,290 ETH worth approximately $236 million entering funds earlier this week.

This suggests that institutional investors see Ethereum’s current price as an attractive entry point.  

Large-scale accumulation at lower levels indicates that long-term investors remain confident in the altcoin. While short-term price movements remain volatile, sustained institutional inflows could provide support for ETH. It could help stabilize Ethereum price in the coming weeks.  

Ethereum Spot ETF Inflows. Source: Glassnode

ETH Price Prediction: Reclaiming Support And Recovering

Ethereum’s price has dropped by 20% over the past week, currently trading at $2,608. The cryptocurrency is holding above the critical support level of $2,546 after losing the $2,698 support. This decline has left ETH in a vulnerable position, with investors closely monitoring price action for further signs of movement.  

The current market conditions present mixed signals, making Ethereum susceptible to prolonged consolidation below $3,000. A potential recovery could begin if ETH reclaims the $2,698 support.

Until then, price action may remain range-bound as traders assess the market’s direction.  

Ethereum Price Analysis. Source:  TradingView

However, if Ethereum fails to hold the $2,546 support level, the downtrend could deepen. A further decline could send ETH to $2,344, invalidating the bullish-neutral outlook and extending investor losses.

This would reinforce bearish sentiment, potentially delaying any significant recovery in the near term.