Ethereum has officially dipped below the $3,000 threshold, marking a significant decline of over 16% within just one week. This downturn is accompanied by a series of bearish indicators that reflect increasing strain in the market. The recent drop is largely attributed to escalating withdrawals from institutional investors, the capitulation of long-term holders, and a general decline in investor confidence during a critical phase for the asset.
Recent data reveals a pronounced downturn in institutional interest in Ethereum. Spot ETH exchange-traded funds (ETFs) experienced outflows totaling $728 million last week, extending a four-week trend of withdrawal. As a result, the total assets managed by these ETFs have fallen to $18.9 billion, reflecting a 16% decrease compared to the previous month. This retreat from institutions is significant, given that demand for ETH ETFs previously contributed to substantial price rallies in early 2025. However, current sentiment has shifted toward a more cautious outlook.
Timothy Peterson from Cane Island Alternative Advisors observes that investors are increasingly perceiving Ethereum as a riskier asset than Bitcoin. This change in sentiment is evident in both ETF movements and positioning in derivatives markets. The ability of ETH to reclaim the $3,000 psychological level will be crucial; failure to do so could lead to heightened panic selling.
Another alarming trend comes from the behavior of long-term holders. Data indicates that wallets holding ETH for three to ten years are now distributing more than 45,000 ETH daily on a 90-day average—activity levels not seen since February 2021. Since late August, as Ethereum began its pullback from recent highs, these holders have significantly increased their average daily spending, which is concerning for overall market stability.
Typically, long-term holders represent the most resilient segment of the market. Their gradual capitulation generally occurs only during periods of significant macroeconomic stress or major trend reversals. The recent selling activity suggests a substantial shift in their confidence, further weighing down an already fragile market structure.
With Ethereum currently trading around $2,975, the upcoming sessions are critical. A sustained drop below the $3,000 mark may pave the way for further declines, while a rebound could indicate that sellers are beginning to exhaust their momentum.
