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$1 Billion Ethereum Bets Fail to Stop ETH Price Decline

Ethereum ETHUSD continues to attract institutional interest despite a recent price pullback. This week alone, more than $1 billion has flowed into ETH investment funds, indicating growing institutional appetite for the asset.

However, the coin's price performance does not reflect this bullish investment activity. Despite strong inflows, ETH remains under pressure, largely due to increased profit-taking by long-term investors.

Ethereum Inflows Rise for 11 Weeks, Price Below $3,600

The second-largest cryptocurrency by market capitalization is experiencing its eleventh week of net inflows into ETH ETFs. This contrasts sharply with Bitcoin BTCUSD, whose price decline appears to have shaken investor confidence, as BTC has recently experienced significant net outflows.

Total Ethereum Spot ETF Net Inflows.

Yet, despite this wave of strong institutional support for ETH, the inflows have not translated into upward price momentum. On the contrary, the price of ETH continues to decline due to increased profit-taking activity.

At press time, the altcoin is trading at $3,704, down 5% since Monday. What's driving this decline?

Smart Money Quietly Heading for Exit

On-chain data shows an increase in ETH's liveliness, suggesting that long-term investors, typically the most resilient players in the market, are increasingly selling their coins. At press time, the ratio is at 0.69.

Liveliness measures the movement of long-held tokens by calculating the ratio of days spent to days spent. If it falls, it means LTH holders are choosing to withdraw their assets from exchanges and hold them.

Conversely, when it rises, more dormant tokens are being moved or sold, signaling profit-taking by long-term investors.

Furthermore, on the ETH/USD one-day chart, the decline in ETH confirms selling among major coin holders. Readings from this indicator show a 7% drop in value since July 20th.

The SMI refers to capital controlled by institutional investors or experienced traders with a deeper understanding of market trends and timing. The SMI tracks the behavior of these investors by analyzing intraday price movements.

Specifically, it measures selling in the morning (when individual traders dominate) against buying in the afternoon (when institutions are more active).

When an asset's SMI falls in this way, smart money sells its positions, and in ETH's case, this allocation appears to be driven by a desire to lock in gains from its recent rally.

ETH is in a tug-of-war between smart money sellers and dip buyers.

ETH could fall below $3,524 if major holders continue selling. If this level is broken, the altcoin could trade around $3,314. A failure of the bulls to establish support at that point could trigger a deeper correction and lead to a drop to $3,067.

However, if buy pressure increases, this bearish view will be invalidated. In this scenario, the price of ETH could revisit the recent cycle high at $3,859 and potentially attempt a break above this level.