Main Points:
Ether gained 75% compared to Bitcoin in Q3, yet slightly lagged in September.
Retail investor involvement remained low, diverging from institutional investments.
Ether (ETH) surged 75% against Bitcoin in Q3, and although recent price actions have slowed, traders remain optimistic about achieving $5,000 by 2025.
Glassnode data suggests strong interest in Ether among futures traders, with its open interest dominance at 43.3%, the fourth-highest on record, while Bitcoin holds 56.7%. In addition, Ethereum’s perpetual futures volume dominance reached a record high of 67%, signifying a major shift in trading activity towards Ether.
Additionally, CryptoQuant analyst Crazzyblockk pointed out the critical condition for a potential Ether breakout. Reclaiming the $4,580 level, which is linked to accumulation and exchange outflow cost bases, is seen as crucial.
On Thursday, over 1.28 million ETH, valued at more than $5.3 billion, transitioned into long-term accumulation addresses, signaling that a successful reclaim could shift market sentiment and facilitate a $5,000 breakout.
ETH has established support near $4,100, aligning with the average cost basis of active addresses.
Related: Last chance for Ethereum? ETH price pattern breaks down as $4K must hold
Institutional demand constrains Ether supply, but is retail participation fading?
Recent demand for Ether has mainly stemmed from institutional investors, affecting the circulating supply. US spot ETH ETFs witnessed total net assets soar from $10.32 billion in June to $27.48 billion in September, gaining over $17 billion during July and August.
Institutional demand also surged from Strategic Ethereum Reserves, spearheaded by Bitmine and SharpLink, with holdings increasing from 5,445,458 ETH on July 1 to 12,029,054 ETH by Sept. 23, a 121% rise, now valued around $46 billion.
Despite this institutional accumulation surge, retail participation appears to be diminishing. Net taker volume on Binance has remained negative over the past month, peaking in late September, indicating ongoing sell-side pressure despite a rising interest in altcoins.
The spot taker CVD (Cumulative Volume Delta) indicator, tracking market buys and sells over 90 days, has been sell-dominant since late July. This suggests retail traders have consistently sold more ETH than bought, reinforcing the gap between institutional accumulation and retail actions.
If retail flows turn positive and the spot taker CVD shifts towards a buy-dominant phase, ETH may experience a rally driven by retail investors, enhancing the existing institutional accumulation and potentially accelerating broader market momentum.
Related: Ethereum bulls tout supercycle, but Wall Street is skeptical
This article does not provide investment advice or recommendations. Every investment and trading decision carries risks, and readers should perform their own research before deciding.
