Ethereum (ETH) fell below the critical $4,000 level amid renewed market uncertainty following comments from Federal Reserve Chairman Jerome Powell.
Powell’s indication that the latest 25 basis point rate cut could be the last of 2025 fueled caution in traditional and crypto markets. As a result, Ethereum price is sitting slightly above $3,900, a daily decline of 2.2%, with Bitcoin and other major altcoins also in the red.
The broader pullback saw Ethereum ETFs record $81.44 million in outflows, led by Fidelity’s FETH at $69.49 million. Only BlackRock’s ETHA fund showed resilience, recording $21.36 million in inflows. The move follows two straight days of positive ETF activity, indicating profit-taking and reduced risk appetite among traders.
ETH's price trends to the downside on the daily chart. Source: ETHUSD on Tradingview
Institutional Demand Rises Even as Ethereum Price Weakens
As the price of Ethereum has fallen, institutional accumulation has intensified. The data shows that institutions now hold 4.1% of Ethereum’s total supply, surpassing Bitcoin’s 3.6% for the first time. Analysts attribute this change to the GENIUS Act, which provides a clear framework for regulating stablecoin and on-chain finance.
This policy clarity has strengthened institutional confidence in Ethereum as the backbone of DeFi and tokenized RWAs. Despite current weakness, many funds continue to add exposure, anticipating Ethereum’s Web3 dominance.
Technically, Ethereum price is showing mixed signals. The RSI sits at 44 and the MACD line remains below the signal line, both indicating slowing bullish momentum.
Analysts warn that if ETH fails to reclaim $4,000, it could revisit support zones around $3,850-3,750. However, a decisive close above $4,100 could reignite the bullish sentiment towards $4,400 – $4,500.
On-chain activity hits record levels despite low fees
Interestingly, the fundamentals of the Ethereum network remain robust even as price momentum cools. On-chain activity has reached record levels, with daily transactions and unique active addresses breaking all-time records.
Likewise, gas fees remain near historic lows, signaling improved scalability through Layer 2 networks such as Arbitrum, Optimism, and Base.
This efficiency milestone showcases Ethereum’s technological evolution, from its proof-of-stake transition to the upcoming EIP-4844 upgrade (proto-danksharding).
Analysts believe that this combination of strong institutional demand and record network usage, despite near-term price pressure, positions Ethereum price for a sustained recovery once macroeconomic headwinds subside.
Cover image from ChatGPT, ETHUSD chart from Tradingview
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