- While institutional investors continue to sell, spot traders have been acquiring more ETH over the past week
- ETH exchange reserves could act as a bullish confirmation for a potential price surge
Ethereum [ETH] has seen a major price drop lately amid a broader market downturn. In fact, over the last 24 hours, the altcoin declined by 10.41% on the charts, bringing its one-month loss to 33.10%.
Institutional investors, including BlackRock and Fidelity, have contributed to this trend by continuing to sell ETH spot exchange-traded funds (ETFs). However, according to AMBCrypto’s analysis, spot traders have helped prevent an even steeper decline.
One week of intense sell-offs
This week has seen significant ETH sell-offs by institutional investors through exchange-traded funds (ETFs). At the time of analysis, these investors seemed to have offloaded approximately $293 million worth of ETFs since the market opened on Monday, 24 February.
A week-long sell-off like this usually alludes to skepticism among institutional investors about ETH’s price outlook. In fact, according to Coinbase’s ETH/USD daily chart, this sell-off caused the asset to drop from an opening price of $2,821.64 to a press-time value of $2,103.84.
Source: Coinglass
Among institutional sellers, BlackRock and Fidelity have contributed the most, offloading $144 million and $65.4 million worth of ETH, respectively, this week.
Spot traders acquire more ETH
While institutional investors have been selling, spot traders have been actively buying ETH over the same period.
Between 24-28 February, approximately $864 million worth of ETH was purchased across cryptocurrency exchanges, according to Coinglass’ exchange netflow data. Notably, even as ETH recorded a 10% drop in the last 24 hours, spot traders made their second-largest purchase of the week, acquiring $241 million worth of ETH.
Source: Coinglass
When significant institutional selling is met with strong spot buying, it points to underlying bullish sentiment in the market.
AMBCrypto found that this week’s buying pressure has been primarily driven by retail investors, as large investors—who typically control a substantial portion of supply—have continued selling. According to IntoTheBlock, from a low of 36,430 ETH sold on 25 February, large investors have since offloaded an additional 114,850 ETH.
If retail traders sustain their buying activity, ETH could maintain its bullish momentum and avoid dropping below the $2,000-threshold.
Reserve levels could confirm trend
The ETH exchange reserve, which tracks the amount of ETH held across different cryptocurrency exchanges, could serve as a confirmation of a price reversal.
Source: Cryptoquant
A decline in exchange reserves hints at potential price appreciation, while an increase alludes to growing selling pressure.
If the press time reading of 18.9 million ETH declines further, it would indicate strengthening bullish momentum and a potential rally for ETH. This would mean that institutional sell pressure won’t potentially weigh on ETH as much.
