Ethereum selling pressure rises: Can the net inflow to the exchange turn positive and the favourable information from institutions' ETFs offset the downside risk at the $3800 level?

Asset management giant T. Rowe Price plans to launch an actively managed multi-coin ETF and is very likely to include Ethereum in its digital asset holdings, although this news has limited price impact in the short term. Current market sentiment has calmed down after the major liquidation on October 10, but on-chain data shows that Ethereum's net inflow to exchanges (7-day moving average) has shifted from an outflow of 31,000 ETH on October 15 to a net inflow of 3,000 ETH, indicating that short-term dumping pressure is increasing. If the key support level of $3,800 is broken, the price of Ethereum may continue to dip to the next target of $3,400.

Institutional ETF Positive: T. Rowe Price Potential Allocation to Ethereum

The participation of traditional financial giants is often seen as recognition of the long-term value and compliance of digital assets, as evidenced by the latest moves from T.Rowe Price.

T. Rowe Price is preparing a new actively managed multi-coin ETF, which is likely to hold Ethereum as one of its core digital assets. Active management means that the fund manager will adjust asset weights based on market conditions, which brings sustained potential institutional demand for ETH.

Although this development is unlikely to immediately impact the price of Ethereum in the short term, it represents the growing acceptance of cryptocurrencies by the traditional asset management industry. Fund managers are currently deciding on specific asset allocations and weightings, but the possibility of including Ethereum, as the second-largest digital asset by market capitalization, is extremely high, which plays an important supporting role in the mid-term narrative.

Derivative Data Reveals Market Sentiment: Deleveraging Cools the Market

After the large-scale liquidation event on October 10, data from the Ethereum derivatives market indicates that the market has entered a relatively cooling and deleveraging phase.

Derivatives data shows that the open interest (OI) for Ethereum remains stable between $19 billion and $20 billion. This is significantly lower than the approximately $27 billion figure before the liquidation events, indicating that the market has relatively de-leveraged, which is often seen as a bearish signal, but also means that the risk of chain liquidations for longs due to future price fluctuations has decreased.

The funding rate is only slightly positive, but it briefly dipped into negative territory over the past two weeks. This reflects cautious market sentiment, with speculative traders showing little enthusiasm for long positions. A deleveraged market with subdued sentiment creates favorable conditions for a healthy subsequent rise.

On-chain indicators shift: Exchange net inflow increases warning of dumping

Analyst CryptoOnchain pointed out on CryptoQuant Insights that the exchange net flow of Ethereum (7-day MA) has shown a significant bearish shift, indicating that short-term volatility may increase.

This indicator has reversed from a net outflow of 31,000 ETH on October 15 to a net inflow of 3,000 ETH. Funds have flowed from individual or institutional wallets into the exchange, which usually indicates that holders have the intention to sell, even in the case where the ETH price has already fallen, the selling pressure remains prominent. This change in flow patterns is a signal that short-term traders must be cautious of.

Before the trend of net inflows into the exchange turns around, traders should remain vigilant about further downward price fluctuations and closely monitor the key support level of $3,800. If this level is effectively broken, $3,400 will become the next strong support test zone.

Price and Position Assessment: Not Reached Surrender Zone, Medium-Term Outlook is Positive

Other key on-chain indicators provide a comprehensive assessment of the current market health, indicating that the market has not yet entered a state of extreme fear or euphoria.

Analyst TeddyVision observed that the price of Ethereum is still well above its realized price support level of $2,300. A price drop below this level usually indicates the beginning of capitulation and a bear market. The current price remains above it, indicating that the market structure has not been damaged, and long-term holders still maintain confidence.

The Market Value to Realized Value Ratio (MVRV) is 1.67, which means that Ethereum holders are, on average, still in a 67% profit state. This figure, while indicating profitability, has not yet reached historically overheated or euphoric regions. Overall, the current market is in a state of non-euphoria, with profits but not overheated, and this consolidation or pullback seems more like an energy accumulation in preparation for a mid-term rise.

Conclusion

Ethereum is experiencing a tug-of-war between institutional positive news and short-term selling pressure. Although T.Rowe Price's potential allocation adds confidence to the long-term demand for ETH, the on-chain signal of net inflows turning positive from the exchange has sounded the alarm for the short-term price trend. Investors should view $3,800 as a crucial support level; if this line is breached, the likelihood of a pullback to $3,400 in the short term will increase significantly. However, indicators such as MVRV suggest that the market has not yet entered extreme sentiment. The current deleveraging and consolidation seem more like a structural adjustment in preparation for a mid-term rise.

Disclaimer: This article is for news information only and does not constitute any investment advice. The cryptocurrency market is highly volatile, and investors should make cautious decisions.