- Ethereum’s bullish divergence invalidated
- Institutional investors are currently selling off ETH and trading volumes are declining.
At the time of writing, Ethereum (ETH) is looking bearish against Bitcoin (BTC) with the ETH/BTC price movement chart showing a significant red line. In fact, the bullish divergence for ETH seemed to be nullified as it approached the 0.04 BTC level.
If Bitcoin continues to gain momentum towards the $61,000 to $62,000 range after reclaiming $57,000, ETH is expected to fall further.
ETH currently lacks a solid support level, so traders will need to wait for improved market conditions before any significant bounce can occur. Ongoing inflows could help ETH regain stability, though it remains weaker than Bitcoin for now.
The ETH/BTC Relative Strength Index (RSI) highlighted this divergence, with the price movement trending lower while the RSI is forming higher lows, signalling a potential reversal.
Source: TradingView
The drop in trading volume also suggests that ETH may soon drop below the 0.04 BTC level. A bearish Bitcoin turn could create an opportunity for ETH to reverse. However, unless otherwise confirmed, a bearish trend for ETH remains the most likely scenario.
Global institutional investors sell ETH
But that's not all: according to Lookonchain on X, major institutions around the world are currently selling off their Ethereum holdings.
For example, Metaalpha recently deposited 6,999 ETH, worth $16.4 million, into Binance, contributing to a total of 62,588 ETH, worth $145.1 million, in deposits over the past six days.
Currently, only 23,500 ETH remain, valued at $55 million. Metalpha has also liquidated Layer 2 tokens such as Optimism (OP) and reduced its staked ETH (stETH) holdings to 1,907 stETH.
Source: Arkham
Ethereum CME Trading Volume
Additionally, ETH may remain weak against BTC due to a decline in futures trading volumes on the Chicago Mercantile Exchange (CME), which fell 28.7% to $14.8 billion in August, hitting its lowest level since 2023.
Year-to-date, ETH prices have also been negative, as have exchange-traded fund (ETF) net cumulative flows. The Ethereum Foundation has also been selling ETH, putting further pressure on the price.
Source: X
This means that ETH may continue to fall and possibly recover in Q4-2024.
Sentiments of the Crowd and Smart Money
Finally, crowd and smart money sentiment is also bearish towards ETH, with both retail traders and institutional investors agreeing that ETH remains bearish in the current market environment.
This alignment between small and large players suggests that Ethereum’s downward trend may continue until market trends change or a significant catalyst emerges to support a price recovery.
Therefore, ETH is expected to remain weak against Bitcoin, especially until cryptocurrency market conditions improve in general.
Source: Market Prophit
