Bearish sentiment is quietly building across the broader crypto market, and Ethereum now faces a tougher path back to the $4,000 level.
ETH Futures Fall to $6.2 Billion, Reflecting Weaker Institutional Support
Open interest in ETH futures on the Chicago Mercantile Exchange (CME) dropped to $6.2 billion, hitting a five-day low and signaling reduced institutional participation.
The Glassnode chart shows open interest rising above $6.5 billion before reversing sharply, mirroring a concurrent ETH price dip toward the $3,600–$3,700 range. CME’s futures market primarily serves institutional investors, so this retreat indicates a scaling back of leveraged positions.
The close correlation between futures positioning and ETH’s price highlights how institutional flows directly impact spot market strength. As open interest and price declined in tandem, it revealed waning confidence from major players. With fewer institutions maintaining exposure, upward momentum is weakening, increasing the likelihood of short-term price corrections and leaving ETH more vulnerable to volatility.
Ethereum Whale Activity Drops as Large Holder Netflow Declines
Ethereum’s whale activity is slowing sharply, with on-chain data showing a 339% drop in large holders’ netflow over the past seven days. The IntoTheBlock chart reveals a steep fall from strong positive inflows of over 236,000 ETH to near-zero and even negative levels during this period.
Large holders are wallets that control more than 1% of ETH’s circulating supply. Their netflow tracks the difference between the tokens they acquire and those they sell. When netflow rises, it indicates accumulation by whales, suggesting confidence in ETH’s price outlook. In contrast, the recent drop signals that major investors are reducing accumulation or increasing selling activity.
This decline weakens a critical source of price support. As whale inflows slow, the market loses the strong backing typically provided by these high-value investors, leaving ETH more exposed to short-term volatility and downward pressure.
Ethereum Breaks Support and Extends Drop Below $3,500
Ethereum (ETH/USDT) dropped from highs near $3,900 to $3,466, losing around 11% in just a few days. The 4-hour chart shows ETH breaking out of its rising channel, where it traded for nearly three weeks, and falling below the key 50-day EMA at $3,699. This breakdown signals a clear loss of bullish strength. Increased selling volume during the decline confirms stronger bearish activity, pushing ETH through both channel support and its moving average.
The price now sits near $3,466, testing support from mid-July consolidation levels. Breaking this support shifts market focus to lower price zones and underscores growing pressure from sellers. The failure to hold the EMA and the channel’s lower boundary suggests ETH’s short-term structure has turned bearish, leaving it vulnerable unless buyers step in to reclaim lost levels.
Ethereum Balance of Power Turns Negative
The Balance of Power (BOP) indicator for Ethereum shows a reading of -0.86, signaling that sellers are in control. Throughout July, the BOP fluctuated around neutral levels but shifted decisively lower as price pressure increased. This negative reading reflects stronger selling momentum relative to buying activity, aligning with Ethereum’s recent drop below $3,500.
The persistent oscillation in previous weeks indicated indecision between bulls and bears, but the latest downward move confirms that selling strength has taken over. This shift in BOP supports the view that Ethereum’s break below its ascending channel and key moving average is backed by consistent selling dominance. If the BOP remains negative, it could reinforce ongoing bearish sentiment and limit any immediate recovery attempts.
Ethereum RSI Enters Oversold Territory
Ethereum’s Relative Strength Index (RSI) has dropped to 27.37, signaling oversold conditions. This marks a sharp decline from late July levels, where the RSI hovered near 60 before turning lower. The consistent downward movement reflects intensified selling pressure as ETH fell from $3,900 to $3,466.
The RSI line remains well below its signal line at 39.98, confirming bearish momentum. This divergence shows that sellers are firmly in control, and buying strength has weakened considerably. Historically, an RSI below 30 indicates oversold conditions, often appearing during strong price declines.
While oversold levels sometimes precede short-term relief rallies, the sustained drop and continued bearish trend suggest Ethereum may face further downward pressure unless demand returns to absorb selling volume.
Ethereum MACD Deepens Bearish Momentum
Ethereum’s Moving Average Convergence Divergence (MACD) shows a strong bearish signal, with the MACD line at -74.2 and the signal line at -41.7. The histogram has expanded in negative territory, confirming intensifying selling pressure. The sharp divergence between the MACD and signal lines illustrates accelerating downside momentum.
Over the past week, ETH’s MACD crossed below its signal line and continued dropping, coinciding with its price decline from $3,900 to $3,466. This bearish crossover marked a shift in trend strength, and the increasing gap reinforces sustained selling dominance.
The histogram’s deepening red bars indicate that bearish control is strengthening, making any immediate recovery unlikely unless momentum slows. Combined with oversold RSI levels, the MACD suggests Ethereum is firmly in a downtrend, reflecting strong downward momentum and a lack of bullish reversal signals.