Crypto Market Stalls as ETF Inflows Dry Up; Ethereum Seen as Key to Next Move
The recent crypto rally is showing signs of exhaustion as institutional flows retreat and ETF inflows collapse. With altcoin appetite wavering and leverage remaining elevated, analysts say Ethereum (ETH) could be the pivotal asset that determines whether markets regain momentum or continue to cool.
Bitcoin (BTC) is currently trading around $118,000, locked in a consolidation range and struggling to reclaim the psychological $120K level. The market’s rally, triggered by BTC’s brief all-time high test, has since transitioned into sideways movement amid profit-taking and a clear drop-off in institutional enthusiasm.
Data from Glassnode reveals that ETF inflows plunged by 80% this week, down to $496 million, with trading volumes across crypto ETFs sliding to $18.7 billion. Meanwhile, Bitcoin’s Relative Strength Index (RSI) has sharply declined, indicating a retreat from overbought territory and reinforcing a risk-off tone among investors.
Derivatives Market Turns Defensive
In the derivatives space, QCP Capital reports increased hedging activity despite funding rates for perpetual futures remaining above 15% — typically a bullish sign. A significant Ethereum call fly was recently unwound, while institutional players added large Bitcoin put positions for downside protection.
“Momentum and macro support are still present,” QCP wrote in its latest market note, “but the current flow environment reflects caution. We expect institutional players to re-engage on dips, as seen in recent sessions.”
Ethereum Holds the Line
Ethereum is trading near $3,783, holding a bullish inverse head-and-shoulders pattern that projects a move toward $4,300, though resistance near multi-year highs and neutral funding rates suggest hesitation among traders. Still, signs of accumulation continue to surface, particularly among long-term holders.
Market maker Enflux sees the current environment as a healthy consolidation rather than a deeper correction.
“There’s no panic in spot or perp markets. The structure is holding,” Enflux told CoinDesk. “The next move hinges on ETH — if flows return to Ethereum and capital re-engages with altcoins, we could see a renewed uptrend.”
Macro Factors Add Headwinds
Broader market dynamics are also weighing on crypto. A nearly 1% rise in the U.S. Dollar Index and improving global risk sentiment — bolstered by a new U.S.-EU trade agreement — have reduced demand for risk assets, including gold and digital currencies.
Market Summary
- BTC: Hovering at $118K, consolidating between support at $114K and resistance near $123K. Whale wallet activity and a recent liquidity sweep have kept upside in check.
- ETH: Trading at $3,783, technically bullish but facing resistance. Market awaiting confirmation from institutional flows.
- Gold: Down 0.7% to $3,313.57, hitting a three-week low as investors shift toward risk assets.
- Nikkei 225: Down 0.61% amid regional uncertainty and cautious trade optimism.
- S&P 500: Closed flat on Monday following the U.S.-EU trade deal, as markets await more direction.
As the crypto market enters a key inflection point, Ethereum’s next move could determine the broader direction. Whether institutional capital returns to ETH and altcoins or continues to sit on the sidelines may define whether this is a pause — or the start of a deeper pullback.
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