Ethereum (ETH) fell below the critical $4,000 level as market uncertainty grew again following comments from Federal Reserve Chairman Jerome Powell.
Powell's recent indication that the last 25 basis point interest rate cut could be in 2025 raised alarm in both traditional and cryptocurrency markets. As a result, the price of Ethereum fell 2.2% for the day to just over $3,900, while Bitcoin and other major altcoins were also in the red.
The widespread decline saw the Ethereum ETF see outflows of $81.44 million, while Fidelity's FETH recorded $69.49 million. Only BlackRock's ETHA fund showed resilience, recording inflows of $21.36 million. This change follows two consecutive days of positive ETF activity, indicating a decline in profit taking and risk appetite among traders.
ETH's price trends to the downside on the daily chart. Source: ETHUSD on Tradingview
Institutional demand increases despite weak Ethereum price
While the price of Ethereum fell, institutional accumulation intensified. Data shows that institutions currently hold 4.1% of Ethereum's total supply, surpassing Bitcoin's 3.6% for the first time. Analysts attribute this change to the GENIUS Act, which provides a clear framework for regulating stablecoins and on-chain finance.
This policy clarity has increased institutional confidence in Ethereum as the backbone of DeFi and tokenized RWA. Despite the current weakness, many funds continue to add exposure in anticipation of Ethereum's Web3 dominance.
Technically, Ethereum price is showing mixed signals. The RSI is at 44 and the MACD line remains below the signal line, indicating that the upward momentum is waning.
Analysts warn that if ETH fails to claw back $4,000, it could revisit the support area around $3,850-$3,750. However, a decisive close above $4,100 could reignite bullish sentiment towards $4,400-$4,500.
Despite low fees, on-chain activity reached an all-time high.
Interestingly, Ethereum’s network fundamentals remain robust even as price momentum cools. On-chain activity reached an all-time high, with daily transactions and unique active addresses breaking all-time records.
Likewise, gas rates remain at historic lows, demonstrating improved scalability through layer 2 networks such as Arbitrum, Optimism, and Base.
This efficiency milestone demonstrates Ethereum's technological evolution from its Proof-of-Stake transition to the upcoming EIP-4844 (proto-danksharding) upgrade.
Despite short-term price pressures, analysts believe this combination of strong institutional demand and record network usage could lead to a sustained recovery in the Ethereum price once macroeconomic headwinds ease.
Cover image by ChatGPT, ETHUSD chart by Tradingview
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