Crypto Rally Pauses as ETF Inflows Plunge; Ethereum Poised to Guide Next Market Move
The crypto market is flashing signs of fatigue as institutional demand wanes and ETF inflows crater. With leverage elevated and altcoin sentiment muted, traders are now looking to Ethereum (ETH) to determine whether the market regains its bullish footing or enters a deeper correction.
Bitcoin (BTC) is holding around $118,000, stuck in a range after briefly touching all-time highs last week. The broader market is consolidating amid profit-taking, as ETF inflows fell sharply—down 80% week-on-week to $496 million, according to Glassnode. ETF trading volume also dropped to $18.7 billion, underscoring institutional retreat.
The Relative Strength Index (RSI) on BTC has rolled over, suggesting the asset is moving out of overbought conditions. Analysts say these shifts signal a cooling trend in risk appetite, particularly among large allocators.
Derivatives Sentiment Turns Mixed
QCP Capital noted a shift in derivatives positioning. Although perpetual futures funding remains elevated—over 15%, indicating continued long bias—recent activity shows large investors hedging downside risk.
A major Ethereum call spread was closed out last week, while fresh protective put positions in BTC were added. These defensive plays suggest reduced conviction for immediate upside.
Still, QCP remains cautiously optimistic. “Momentum and macro conditions still lean constructive,” the firm said. “We expect institutions and long-term holders to re-enter on dips, as they did Friday.”
Ethereum at the Crossroads
ETH is trading at $3,783, maintaining a bullish inverse head-and-shoulders pattern with a projected upside target near $4,300. However, resistance at multi-year highs and flat funding rates point to market indecision.
Enflux, a crypto market-making firm, sees current conditions as a consolidation phase, not a trend reversal. “The market is stable. Spot and perp flows suggest wait-and-see positioning,” Enflux said in a note.
According to the firm, Ethereum could be the trigger for the next directional shift: “How institutional ETH flows develop—and whether capital rotates back into altcoins—will shape the next leg of this cycle.”
Macro Headwinds Build
Outside crypto, macro sentiment is shifting. A nearly 1% rise in the U.S. Dollar Index has pressured risk assets, while gold fell 0.7% to $3,313.57 on easing safe-haven demand after the U.S.-EU trade pact. Asian markets opened lower, with Japan’s Nikkei 225 down 0.61%. U.S. equities were flat Monday, as investors await earnings and the Fed’s next move.
Market Snapshot
- Bitcoin (BTC): Trading at $118K, ranging between $114K and $123K. Whale activity and supply spikes have capped upside.
- Ethereum (ETH): Holding support near $3,783; momentum pattern intact but awaiting fresh capital inflows.
- Gold: Down to a three-week low amid stronger risk appetite.
- Nikkei 225: Down 0.61% as traders assess regional trade outlook.
- S&P 500: Closed flat following muted reaction to the U.S.-EU trade agreement.
Outlook
With ETF flows receding and leverage still high, the market is at a crossroads. ETH’s performance and institutional engagement will likely set the tone for what’s next—renewed upside or extended consolidation.
