Recently, Ethereum [ETH] experienced a significant drop in price amidst a general market downturn. Over the past 24 hours, the alternative coin witnessed a 10.41% decrease, resulting in a total one-month loss of 33.10%.
The decline in Ethereum’s price has been partly attributed to institutional sell-offs, with major players like BlackRock and Fidelity continuing to sell ETH spot exchange-traded funds (ETFs). Despite this, spot traders have played a role in preventing a more pronounced decrease, according to analysis by CryptoCrypto.
Notable Institutional Sell-Offs Over a Week
The past week has witnessed substantial sell-offs of ETH by institutional investors through ETFs. As of the latest data, these investors have unloaded around $293 million worth of ETFs since the market opened on Monday, February 24th.
Extended sell-offs like this often indicate doubts among institutional investors regarding the future price of ETH. Coinbase’s ETH/USD daily chart reflected this trend, as the sell-off led to a drop in the asset’s value from an opening price of $2,821.64 to $2,103.84 at the time of reporting.
BlackRock and Fidelity emerged as primary contributors to the institutional selling trend, with BlackRock offloading $144 million worth of ETH and Fidelity selling $65.4 million worth during the week.
Increasing ETH Acquisition by Spot Traders
In contrast to institutional selling, spot traders have been actively acquiring ETH during the same period.
Between February 24th and 28th, approximately $864 million worth of ETH was bought across various cryptocurrency exchanges, as per Coinglass’ exchange netflow data. Despite ETH’s 10% decline in the last 24 hours, spot traders made their second-largest purchase of the week, totaling $241 million in ETH.
A strong spot buying trend amid significant institutional selling hints at an underlying bullish sentiment prevailing in the market.
Retail investors have been the driving force behind this week’s buying surge, as larger investors, who usually control a significant supply, have continued to sell off their holdings. IntoTheBlock reported a decrease from 36,430 ETH sold on February 25th to an additional 114,850 ETH offloaded subsequently by large investors.
Should retail traders sustain their buying momentum, Ethereum is likely to maintain its bullish run and avoid dipping below the crucial $2,000 mark.
Confirmation of Trend through Exchange Reserve Levels
Monitoring the ETH exchange reserve, which tracks the quantity of ETH held on various cryptocurrency exchanges, could potentially validate a price reversal.
A decrease in exchange reserves suggests a possible price increase, while an uptick indicates mounting selling pressure.
If the current reading of 18.9 million ETH at the moment continues to decline, it may signal a strengthening bullish momentum and a potential upswing for ETH. This scenario would imply that institutional selling pressure might have a lesser impact on Ethereum’s price moving forward.