Ethereum ETFs remained completely stagnant, while Bitcoin exchange-traded funds saw a strong net inflow of $108 million, led by BlackRock’s IBIT ETF with $80.96 million. Despite market volatility, all nine Ethereum ETFs recorded net zero flows, indicating a lack of investor confidence or engagement. There is no clearer difference between the activity of ETFs and Bitcoin ETFs in Stock exchange.
Although the market has begun to recover, Ethereum is still being ignored as companies such as Fidelity Van Eyck and Greyscale are seeing a constant movement of capital in Bitcoin-related products. Although Ethereum has long been the second-largest cryptocurrency, this recession shows that the story of this asset is not convincing to organizations currently.
Technically, Ethereum remains under pressure, with the Exponential Moving Average (EMA) indicators showing prevailing bearish trends, with short-term averages lagging behind long-term metrics. This suggests that bearish momentum still dominates market sentiment.
In the event of an additional correction, Ethereum may experience initial support levels around $1,535. If this level fails, it risks a sell-off that could reach $1,412 or even $1,385. These moves represent critical thresholds that traders and investors should keep a close eye on.
However, a shift in momentum is still possible. If buying returns to demand, Ethereum could test the resistance level at $1,669, which is crucial to rebound further. A successful breakout above this level could pave the way for further price movement towards $1,749, possibly $1,954. With more supply concentrated in less hands, the tipping point becomes a sharp drop in prices much lower, potentially destabilizing the Ethereum market.
Ethereum fees fall amid market slump and upgrade expected
Transaction fees on the Ethereum blockchain have fallen to their lowest levels since 2020, currently averaging around $0.168 per transaction. The decline is attributed to a significant drop in user activity, with fewer individuals sending Ether and interacting with smart contracts, according to in-chain analytics platform Sentiment.
Brian Quinlivan, marketing director at Santiment, noted that when user activity increases, transaction fees tend to rise as users offer higher amounts for quick confirmations. In contrast, the current stagnation in transactions has reduced the need for such a bidding, resulting in lower average fees.
The recent reduction in fees coincides with broader challenges facing the market. After US President Trump announced comprehensive tariffs on April 2, the traditional and cryptocurrency markets have slowed down. Over the past 14 days, the value of Ethereum has fallen by more than 12.5%, settling at just under $1,600.
Under these conditions, traders seem to be cautious, waiting for global economic uncertainty to stabilize before increasing the frequency of their transactions with Ethereum and altcoins. Quinlevan has noted increased sensitivity among retail investors to Ethereum discussions and economic news. With the asset approaching critical support levels.
The Pictra Ethereum network upgrade is scheduled to launch on May 7. This upgrade aims to double the capacity of Tier II modules, reduce transaction fees, and allow fees to be paid in stable currencies such as USDC and DAI. In addition, the maximum deposit will increase from 32 Ethereum to 2048 Ethereum.
The Pictra upgrade follows Decon’s March 2024 upgrade. Which has already reduced transaction fees for second-tier networks and improved the economic landscape for Ethereum aggregation.
ETH ownership concentration threatens market stability
The recent rise in Ethereum holdings at whale addresses – which hold more than 1% of total supply – has reached 46%, which is worrying. This rise points to a worrying trend as ownership is increasingly concentrated in the hands of fewer investors, posing risks to price stability.
The whales began assembling Ethereum robustly around March, overtaking retail investors in their holdings. Meanwhile, titles categorized as retail or at the investor level saw a decline in their shares. Suggesting a decline in retail interest in Ethereum.
This pattern of accumulation (43% to 46% in a matter of months) shows a worrying picture of the centrality of the Ethereum network. Large owners usually influence the market significantly due to their ability to execute large trades, which can affect prices significantly. Unfortunately, this increased concentration could lead to sudden market volatility if sentiment changes.
Recent analyses reveal that whale addresses that control between 1,000 and 100,000 Ethereum now control nearly $59 billion, accounting for about 25.5 percent of the supply in circulation. This reaffirms the shift of influence towards large owners within the ecosystem. With the exception of those associated with centralized exchanges.
One of the most notable whale transfers was by Galaxy Digital. Which recently transferred $100 million from Ethereum, prompting speculation about potential sell-offs or strategic reallocations. Adding layers of uncertainty to market sentiment.
These high levels of concentration increase the market’s vulnerability to market volatility. A single panic from these whales could lead to significant price drops. Which could be exacerbated by lower participation by retail investors.
