Ethereum market stagnates! Analysts downgrade year-end target price to $5000, retail investors retreat and institutions depeg.

Ethereum (ETH) has been consolidating since September after an astonishing 75% increase compared to Bitcoin in the third quarter, with trading enthusiasm clearly cooling down. Although Wall Street investment banks and crypto analysts remain optimistic about a year-end target price of $5,000, this expectation has been significantly revised down from the previously projected $8,000-10,000. More importantly, the market is witnessing a "differentiation script" between institutions and retail investors: while retail investors continue to withdraw, institutional funds are quietly locking the circulating Ether into "vaults" through futures, ETFs, and staking. How will this change in supply and demand structure affect Ethereum's performance in the last quarter of 2025?

####Institutional and Retail Investor Divergence: Who is Buying, Who is Selling?

The Ethereum market is experiencing a clear differentiation among investors. On one hand, institutional investors are heavily accumulating ETH; on the other hand, retail investors are continuously withdrawing. This phenomenon of differentiation has been confirmed by multiple data indicators.

"The behavioral differences between institutions and retail investors have never been so pronounced," said cryptocurrency market analyst Sarah Chen. "This divergence reflects the starkly different views that various types of investors have regarding the long-term value of Ethereum."

####Institutions Quietly Accumulate: Three Major Channels Target ETH

The interest of institutions in ETH is mainly reflected through three channels:

#####1. Transfer of Dominance in the Futures Market

(Source: Glassnode)

According to Glassnode data, the proportion of ETH futures open interest has risen to 43.3%, the fourth highest in history; the proportion of perpetual futures trading volume has even set a new high of 67%, indicating that the market focus is shifting towards Ethereum. Notably, the Chicago Mercantile Exchange (CME) accounts for as much as 72% of the open interest in ETH calendar futures, highlighting the dominance of traditional financial institutions.

"CME's dominance is one of the best indicators of institutional participation," explained derivatives market expert Michael Wong. "Traditional financial institutions prefer to trade through the regulated CME rather than crypto-native exchanges."

#####2. ETF funds continue to flow in

SoSoValue data shows that the total net assets of the US spot ETH ETF increased from 10.32 billion dollars in June to 27.48 billion dollars in September, with over 17 billion dollars pouring in within just three months, becoming the main force of supply compression.

"The success of the ETF far exceeds market expectations," ETF analyst Robert Lee said, "These products provide traditional investors with a convenient channel to access Ethereum within a familiar regulatory framework."

#####3. Strategy Reserves and Stake Surge

In addition to the ETF, the strategy Ethereum reserves have surged by 121% in just over two months, reaching approximately 46 billion USD. Wallets holding more than 10,000 ETH, known as "whale" wallets, have increased their holdings by over 9% this year, further consolidating their positions. Meanwhile, the staked ETH has reached 36 million coins, accounting for about 33% of the total supply, making the freely tradable coins increasingly scarce.

"The increase in the staking ratio has formed structural support for the price," explained blockchain researcher Jennifer Zhang. "Every ETH that is staked means a reduction in the circulating supply in the market, which, under stable or growing demand, is beneficial for the price in the long term."

####Retail investors continue to exit: A warning signal of lost confidence

(Source: CryptoQuant)

In contrast to the institutional firepower, there is a clear trend of retail investors exiting the market. CryptoQuant statistics show that large CEXs have continued to experience net selling over the past 30 days, with selling pressure amplifying in late September; the cumulative trading volume difference of spot buyers (Spot Taker CVD) has also been dominated by sellers within the last 90 days.

"The cooling of retail investor sentiment is the main resistance to short-term price increases," said market psychology expert David Wang. "Without active participation from retail investors, the difficulty of breaking through key resistance levels will significantly increase."

The differentiation between institutions and retail investors not only affects short-term price fluctuations but may also change the long-term market structure of Ethereum, gradually transforming it from a speculative asset dominated by retail investors into a strategic asset held by institutions.

####$4,580: The Key Battlefield for Year-End Market Trends

(Source: CryptoQuant)

From a technical perspective, $4,580 has become the focal point for both bulls and bears. CryptoQuant analyst Crazzyblockk emphasized in the report: "Regaining $4,580 is crucial for a potential breakthrough for Ether."

On-chain data shows that over 1.28 million ETH (approximately 5.3 billion USD) have flowed into long-term accumulation addresses, with another 1.7 million ETH being heavily absorbed in the range of 4,300 to 4,400 USD, forming the first line of defense for an upward attack by the end of the year.

"$4,580 is not only a technical resistance level but also a psychological barrier," explained technical analyst Mark Johnson. "Breaking through this level and holding above it would open up space for a push towards $5,000 by the end of the year; conversely, if it cannot break through, it may lead to further consolidation or even a pullback."

####Supply Tightening: Structural Advantages of Ethereum

The supply dynamics of Ethereum are undergoing profound changes. CryptoQuant charts show that the trend of ETH inflows into long-term accumulation addresses has not waned, and a large amount of chips is concentrated above $4,300. This supply-demand gap provides a downside buffer for the price and lays the groundwork for a breakout above $5,000.

"The supply tightening of Ethereum is its unique advantage compared to other encryption assets," said blockchain economist Lisa Chen. "The burning mechanism introduced by EIP-1559, coupled with the increase in staking ratio, has created a structurally supply-constricting environment."

This combination of supply tightening and institutional demand provides solid support for the long-term value of Ethereum. However, in the short term, insufficient retail investor participation may limit upward price momentum.

####Fusaka Upgrade: Potential Catalyst for Year-End Market

The next shot in the arm that the market is looking forward to is the Fusaka upgrade, expected to go live on December 3. This upgrade will enhance Ethereum's scalability, reduce gas fees, and strengthen data availability, and is seen as a key event that could catalyze price.

"The Fusaka upgrade has far-reaching implications for the Ethereum ecosystem," explained blockchain technology expert Robert Chen. "It will not only improve network performance but also enhance Ethereum's position as a global settlement layer, which is crucial for institutional adoption."

Historical data shows that significant network upgrades for Ethereum often trigger price fluctuations before and after the events. If ETH can stabilize at $4,580 before and after the Fusaka upgrade and turn that price level into support, the $5,000 target will be more likely to be achieved.

####Regulatory Clarity: Institutional Adoption Boosters

Another positive factor for the Ethereum market is the gradual clarification of the regulatory environment. The Trump administration's friendly stance on encryption, combined with the successful launch of ETFs, has provided a clearer legal framework for institutional participation.

"Regulatory certainty is a key driver for institutional adoption," said encryption regulatory expert Jennifer Lee. "As the regulatory framework gradually improves, more traditional financial institutions will consider incorporating Ethereum into their investment portfolios."

In addition, the 3% to 6% stable annual yield offered by Ethereum staking is attractive in the current low-interest-rate environment, further enhancing its appeal as an institutional-grade asset.

####Year-end target of $5,000: a conservative but realistic expectation

Taking into account institutional adoption, supply dynamics, technological upgrades, and the regulatory environment, analysts generally believe that $5,000 is a reasonable target price for Ethereum by the end of the year.

"The target price of $5,000 reflects a cautious optimism in the market towards Ethereum," said crypto strategist Michael Zhang. "This level takes into account the growth in institutional demand, while also recognizing the limitations that may arise from insufficient retail investor participation."

It is worth noting that this target price has been significantly revised down from the $8,000-10,000 range called by some analysts at the beginning of the year, reflecting a cooling of market sentiment and an awareness of short-term challenges.

####Risk Factors: Potential Downward Pressure

Despite the overall optimistic outlook, investors still need to be wary of several risk factors that may affect the price of Ethereum:

Retail investor participation remains sluggish: If retail investor confidence does not recover, it may limit the ability to break through key resistance levels.

Technical upgrades delayed or issues: The Fusaka upgrade may negatively impact market sentiment if it encounters technical problems or delays.

Macroeconomic uncertainty: Global economic slowdown or financial market volatility may affect risk assets, including cryptocurrencies.

Regulatory reversal: The sudden change in the regulatory environment may undermine market confidence.

Increased competition: The competition from other smart contract platforms may divert attention away from Ethereum.

"Investors should adopt a balanced investment strategy," suggested risk management expert David Lee. "Although the long-term outlook is optimistic, short-term volatility may intensify, especially against the backdrop of a divergence in behavior between institutions and retail investors."

####Conclusion: A new era led by institutions has begun

The Ethereum market is undergoing a structural transformation, evolving from a retail investor-driven speculative market to a strategically held institutional asset. This shift may lead to changes in price volatility patterns, making it more akin to traditional financial assets.

"We are witnessing the maturation process of the Ethereum market," market strategist Mark Wilson summarized, "Institutional participation brings more stability and depth to the market, but it may also reduce explosive price increases in the short term."

In the last quarter of 2025, whether Ethereum can break through 5,000 USD will depend on the continued strength of institutional demand, the smooth implementation of the Fusaka upgrade, and the potential return of retail investor confidence. Regardless of the outcome, this differentiation scenario between institutions and retail investors will have a profound impact on the long-term development trajectory of Ethereum.