Ethereum price action reverted below $3,300 after failing to secure momentum for a sizable recovery, earlier today. While this outcome mirrored weak demand this week, a key observation in the last 24 hours may indicate an upcoming tidal shift in the coming days. Although Ethereum price remained subdued, its fund market premium just registered a massive spike. The indicator surged to the highest level observed so far this year.
For reference, the Bitcoin fund market premium did not demonstrate significant upside during the same period. The indicator’s spike confirmed that companies were aggressively seeking more exposure to Ethereum indirectly. The Fund market premium’s spike confirmed that institutional investors remained confident about ETH’s long-term prospects despite the recent market downturn. In other words, smart institutional money was taking advantage of the extreme fear and discounted prices. On-chain data also revealed that they were not the only ones positioning themselves when there was blood on the streets.
Ethereum Whale Activity Reveals Price Recovery Expectations
Subdued Ethereum whale activity underscored weak recovery attempts over the last few weeks. However, whale movements, especially in the derivatives market, may point to rising expectations of a recovery attempt during the weekend. Whale order and large trades data on Coinglass revealed that whales executed roughly $1.7 billion worth of ETH long positions in the last 2 days. This was only on Binance and OKX futures. Such a substantial figure was consistent with bullish expectations at least in the short term, after the midweek downward trend exhaustion.
Meanwhile, the robust derivatives demand for the cryptocurrency was not consistent with the situation in the spot market. Binance whales sold off about $9.57 million worth of ETH on Binance spot, but their sell pressure was offset by $11.9 million worth of demand from whales on OKX. Meanwhile, Coinbase whales sold off almost $1 million worth of the cryptocurrency. Weak spot demand from the whales cohort may indicate a lack of conviction in Ethereum ETH ability to achieve a robust rally. Also, ETH open interest was still struggling to stay above $39 billion at the time of observation. Overall market net flows remained negative by over $50 million in the last 24 hours.
Capital Flows Favor Ethereum, But is it enough for a Solid Floor Price?
According to a recent CryptoQuant analysis, the 7-day ERC20 stablecoin net flow’s moving average pushed above $640 million on 5 November. Most of those stablecoin flows were on the Binance exchange. Meanwhile, roughly 5,355 ETH worth of net exchange outflows were observed. This suggests that recent stablecoin flows were used to acquire ETH, which was then moved to self-custody wallets.
Despite these observations, the bears continued to hammer down on ETH price, subduing any bullish attempts. The cryptocurrency was only about a 6% drop away from losing the $3,000 price level. The last time that Ethereum (ETH) price traded below $3,000 was over 3 months ago, towards the end of July. The cryptocurrency risked sliding below this key price point, an outcome that may further erase any recovery expectations. It is worth noting that the rising demand near the $3,000 may fortify support within this key price point. A strong demand build-up may trigger a recovery wave. However, sustained sell pressure risks eroding that support and triggering another bearish capitulation episode.