Ethereum’s price momentum is facing a critical test despite strong institutional inflows.
Data shows that U.S. spot Ethereum ETFs attracted over $3 billion in net inflows during August, marking their second-best month since launch. Yet, ETH’s performance relative to Bitcoin remains subdued, with the ETH/BTC ratio stuck at 0.037 — still requiring a near 2x rally to revisit its 2021 levels.
ETF Demand Supporting Price Action
Institutional demand continues to act as a buffer against retail profit-taking. According to SoSoValue, consistent ETF inflows highlight a growing appetite among traditional investors, which could help stabilize Ethereum’s price above key levels. However, analysts caution that ETF demand alone may not be enough to ignite a full-scale altcoin rally. The Altseason Index currently sits at 42/100, suggesting Bitcoin dominance is still too strong for altcoins to outperform.
Whale Accumulation vs. Leverage Risks
On-chain data reveals that Ethereum whales added 1.49 million ETH in July, worth roughly $6.6 billion. This accumulation has reduced liquid supply, often a bullish sign for long-term price appreciation. However, the derivatives market paints a more cautious picture. Perpetual futures open interest surged 17.5% to $849 billion, raising concerns over excessive leverage.
Analysts warn that if Ethereum breaks below $4,200, the market could see up to $1.3 billion in long liquidations, according to CoinGlass. Such an event might erase recent ETF-driven gains and stall momentum heading into September.
Technical Outlook
Ethereum is currently trading around $4,412, down slightly on the day. Indicators suggest short-term consolidation after a heated rally, with RSI hovering near neutral levels. Michaël van de Poppe noted that ETH failed to hold above a crucial resistance zone, which could lead to more sideways price action before the next major move.
What to Watch Next
For Ethereum to spark an altseason, it must start closing the gap with Bitcoin and break out of its relative weakness. Sustained ETF inflows, coupled with reduced retail selling, could set the stage. But with leverage in the system running high, traders remain on alert for sharp corrections.
If ETH can hold above $4,200 and regain momentum against BTC, analysts believe a new leg upward may follow — potentially driving altcoins into a broader breakout.
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Alex is an experienced financial journalist and cryptocurrency enthusiast. With over 8 years of experience covering the crypto, blockchain, and fintech industries, he is well-versed in the complex and ever-evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His approach allows him to break down complex ideas into accessible and in-depth content. Follow his publications to stay up to date with the most important trends and topics.
Source: https://coindoo.com/market/ethereums-etf-boom-vs-bitcoins-dominance-what-traders-should-watch/