After a brief and sudden market-wide rise, the price of Ethereum is once again approaching the pivotal mark of $2,100, registering a 12% increase over the past day. Despite Wednesday’s rebound, the broader ETH market is still quite bearish, but bullish sentiment appears to be gaining momentum in the spot ETF sector.
Sharp decline meets quiet Ethereum Spot ETF inflows
Ethereum’s recent price movement has been quite brutal, with sharp declines and continued volatility having a significant impact on market sentiment. However, beyond the persistent decline in prices, a different narrative is unfolding around the world. Ethereum Spot Exchange Traded Funds (ETFs).
Despite the sell-off, which caused the price of ETH to drop from $4,900 to below $2,000, spot ETF flows are showing renewed interest and, in some situations, continued capital allocation. This gap between strong ETF demand and poor price performance raises the possibility that institutional and long-term investors see the decline as an opportunity rather than a warning.
After a significant outflow period in mid-2025, Leon Waidmann, market expert and head of research at Lisk, highlighted that ETH has seen selling pressure steadily decrease on its exchange funds. The huge influx waves that occurred in late 2024 and early 2025 have disappeared, but the peak panic sale also turns out to be a problem.
Compared to previous periods of turbulence, recent flow bars are much smaller in both directions and sellers are running out of steam. According to the expert, this trend is relevant as the institutional exodus appears to be petering out despite one of the largest ETH drawdowns in recent memory.
Currently, weak hands that wanted to exit the market have already done so, and this does not mean that the ETH price is already reached. There is still one slight flow bias in recent weeks, and a clear accumulation the signal has not yet manifested itself.
However, the selling intensity is clearly fading, which represents the first thing that must happen before a trend reversal appears. So, Waidmann warned that when selling stops before sentiment recovers, investors should pay attention. Interestingly, this is where the next stage begins to develop.
ETH short positions disappear from the market
Given the latest bullish response, the Ethereum Market is currently undergoing a crucial change. Market Expert and CW Investor reported that ETH short positions are now completely destroyed, suggesting an increasingly positive market environment.
The expert pointed out that there remain bearish bets in the ETH market, with investors gradually moving to the long side. Despite this major change in investor sentimentthe rate of increase of highly leveraged long positions is very slow.
Data shared by CW suggests that investors with high debt levels appear to have used up much of their remaining capital. However, the expert called this trend a very positive situation that could be crucial for the price of ETH.
Featured image of Adobe Stock, chart from Tradingview.com
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