Ethereum (ETH) has fallen below the key $4,000 level as market uncertainty rises again following comments from Federal Reserve Chairman Jerome Powell.
Chairman Powell’s suggestion that the latest 25 basis point rate cut could be the last in 2025 has heightened alarm in both traditional and crypto markets. As a result, Ethereum’s price is just above $3,900, down 2.2% daily, with Bitcoin and other major altcoins also in the red.
Due to the broad decline, the Ethereum ETF recorded $81.44 million in outflows, led by Fidelity’s FETH, which lost $69.49 million. Only BlackRock’s ETHA fund showed resilience, recording inflows of $21.36 million. The change comes after a second straight day of positive ETF activity, indicating profit-taking and a decline in risk appetite among traders.
ETH's price trends to the downside on the daily chart. Source: ETHUSD on Tradingview
Institutional investor demand increases even as Ethereum price falls
While the price of Ethereum has fallen, institutional accumulation has intensified. According to the data, institutional investors currently hold 4.1% of Ethereum’s total supply, surpassing Bitcoin’s 3.6% for the first time. Analysts attribute this change to the GENIUS law, which provides a clear framework for stablecoins and on-chain financial regulation.
This policy clarity has increased institutional confidence in Ethereum as the backbone of DeFi and tokenized RWA. Despite the current weakness, many funds continue to add exposure in anticipation of Ethereum’s Web3 dominance.
Technically, Ethereum price is showing mixed signals. The RSI is at 44 and the MACD line is still below the signal line, both indicating bullish momentum is weakening.
Analysts have warned that if ETH fails to regain $4,000, it could revisit the support zone around $3,850-$3,750. However, a definitive close above $4,100 could reinvigorate bullish sentiment towards $4,400-$4,500.
On-chain activity reaches record high amid low fees
Interestingly, Ethereum’s network fundamentals remain strong even as price momentum cools. On-chain activity soared to an all-time high, with daily transactions and unique active addresses setting new all-time records.
Similarly, gas prices remain near historic lows, demonstrating the increased scalability provided by Layer 2 networks such as Arbitrum, Optimism, and Base.
This efficiency milestone marks the technological evolution of Ethereum, from the proof-of-stake transition to the upcoming EIP-4844 (protodunk sharding) upgrade.
Analysts believe that despite short-term price pressures, the combination of strong institutional demand and record network usage will lead to a sustained recovery in Ethereum prices once macroeconomic headwinds subside.
Cover image from ChatGPT, ETHUSD chart from Tradingview
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