Main Points:
Ether increased by 75% against Bitcoin in Q3, though it has shown slight underperformance in September.
Weak retail investor involvement has led to a divergence from institutional flows.
Ether (ETH) surged 75% compared to Bitcoin in Q3, and despite recent price stagnation, traders remain optimistic that the altcoin could reach $5,000 by 2025.
Data from Glassnode shows that futures traders are increasingly focused on Ether. The open interest for Ether stands at 43.3%, the fourth highest on record, while Bitcoin is at 56.7%. Additionally, Ethereum’s perpetual futures volume has achieved a new all-time high of 67%, reflecting a significant shift in trading activity toward Ether.
Furthermore, CryptoQuant analyst Crazzyblockk pointed out the crucial “key condition” for a potential Ether breakout. The analyst indicated that reclaiming the $4,580 level, linked to accumulation and exchange outflow costs, is essential.
On Thursday, over 1.28 million ETH, valued at over $5.3 billion, moved into long-term accumulation addresses, and a successful reclaim could enhance market sentiment, paving the path toward a $5,000 breakout.
ETH has found support near $4,100, aligned with the average cost basis of active addresses.
Related: Last chance for Ethereum? ETH price pattern breaks down as $4K must hold
Institutional Demand Reduces Ether Supply, But Is Retail Participation Declining?
Recent Ether demand has primarily come from institutions, which has decreased circulating supply. US spot ETH ETFs experienced a rise in total net assets to $27.48 billion in September, up from $10.32 billion in June, gaining over $17 billion during July and August.
Additional institutional interest came from Strategic Ethereum Reserves, led by Bitmine and SharpLink, with their ETH allocations increasing to 12,029,054 ETH by September 23 from 5,445,458 ETH on July 1, representing a 121% increase, currently valued at approximately $46 billion.
Despite this spike in institutional accumulation, retail participation seems to be declining. Net taker volume on Binance has remained negative for the last month, peaking in late September, indicating ongoing sell-side pressure amid a general enthusiasm for altcoins.
The CVD (Cumulative Volume Delta) indicator for spot takers, which tracks the cumulative difference between market buys and sells over a 90-day period, has shown a consistent sell dominance since late July. This indicates that retail traders are selling ETH more than they are buying, emphasizing the disconnect between institutional accumulation and retail actions.
If retail flows become positive and the spot taker CVD shifts to a buying phase, ETH could experience a retail-driven rally, enhancing ongoing institutional accumulation and potentially boosting broader market momentum.
Related: Ethereum bulls tout supercycle, but Wall Street remains skeptical
This article does not constitute investment advice or recommendations. All investments and trading activities carry risk, and readers should perform their own due diligence before making any decisions.
