Ethereum stalls below the $4,000 mark as whales and large institutions retreat

Ethereum (ETH) may face bearish pressure in August as the support from investment institutions and whales – a factor that helped ETH reach a peak of $3,800 in July – is weakening.

Pessimistic sentiment is quietly spreading across the crypto market, making the path back to the $4,000 mark for the largest altcoin more difficult.

ETH futures fall to 6.2 billion USD: Are institutions losing confidence?

On-chain data and derivatives indicate that large investors' activities are trending bearish. Specifically, the open interest contract (open interest) for ETH futures on the Chicago Mercantile Exchange (CME) has sharply fallen, closing yesterday at the lowest level in 5 days at 6.2 billion USD.

ETH futures contracts on CME | Source: GlassnodeThis is a noteworthy signal because the ETH futures market on CME primarily serves financial institutions that want to access this asset in a legal and regulated manner. The fall in open contracts indicates that investment organizations are cutting back on their holdings of ETH.

When the buying power from large investors falls, the support pressure for ETH also weakens, increasing the likelihood of a short-term correction.

Additionally, the activity of whales has also significantly decreased. On-chain data from IntoTheBlock shows that net capital flow from large wallets has fallen by 339% over the past 7 days.

The net flow of large ETH holders | Source: IntoTheBlockLarge holders are whale addresses holding more than 1% of the circulating supply of an asset. Net flow monitors the difference between the tokens they buy and sell over a specific period.

If this value increases, it indicates that they are accumulating, showing confidence in the future value of ETH. Conversely, when the value falls sharply, it indicates that the accumulation momentum is cooling down, causing short-term support to weaken.

Ethereum falls 10% as selling pressure surges – Is the next target $3,314?

Currently, ETH is trading below $3,500, falling nearly 15% compared to yesterday. During this period, its trading volume surged by 17%, creating a bearish divergence – a phenomenon that often occurs when volume increases while price falls, signaling that selling pressure is rising.

If this continues and ETH cannot regain the important support level around $3,524, the price may fall further down to $3,314.

Technical analysis of ETH | Source: TradingViewHowever, if demand recovers, ETH may reverse and rise to $3,859.

Vincent