Ethereum Dips Under $4,000 Despite Institutional Interest

Ethereum (ETH) has recently dipped below the pivotal $4,000 mark, a development prompted by growing market unease following remarks made by Federal Reserve Chair Jerome Powell.

Powell’s comment indicating that the recent 25-basis-point rate cut might be the last for 2025 has instigated caution across both traditional and cryptocurrency markets. Consequently, Ethereum is currently trading slightly above $3,900, reflecting a 2.2% decrease on the day, with Bitcoin and several other significant altcoins also experiencing declines.

This market retreat has resulted in Ethereum ETFs witnessing outflows totaling $81.44 million, with Fidelity’s FETH leading the charge at $69.49 million. In contrast, BlackRock’s ETHA fund stood out by posting inflows of $21.36 million. This trend follows two consecutive days of positive ETF activity, hinting at profit-taking and a diminished risk appetite among traders.

Despite the downturn in Ethereum’s price, institutional interest is on the rise. Recent data indicates that institutions now command 4.1% of Ethereum’s total supply, surpassing Bitcoin’s 3.6% for the first time. Analysts credit this shift to the GENIUS Act, which offers a clear regulatory framework for stablecoins and on-chain finance.

This clarity in policy has bolstered institutional confidence in Ethereum, recognized as a cornerstone of decentralized finance (DeFi) and tokenized real-world assets (RWAs). Even amid current price pressures, numerous funds are increasing their exposure, anticipating Ethereum’s dominance in the Web3 landscape.

From a technical standpoint, Ethereum’s price exhibits mixed indicators. The Relative Strength Index (RSI) is currently at 44, while the Moving Average Convergence Divergence (MACD) line remains underneath the signal line, suggesting a waning bullish momentum.

Analysts warn that if Ethereum cannot reclaim the $4,000 threshold, it might re-test support levels in the $3,850 to $3,750 range. Conversely, a strong close above $4,100 could reignite bullish sentiment, potentially pushing prices toward the $4,400 to $4,500 range.

Interestingly, the fundamentals of Ethereum’s network remain robust, even while price trends cool down. On-chain activity has skyrocketed to unprecedented levels, with daily transactions and unique active addresses reaching all-time highs.

Additionally, gas fees have remained near historically low levels, which reflects improved scalability thanks to Layer-2 solutions like Arbitrum, Optimism, and Base.

This milestone in efficiency underscores Ethereum’s technological growth, transitioning from proof-of-stake to the upcoming EIP-4844 upgrade, which is set to enhance network capabilities further.