Ethereum ETFs Continue Asset Outflows
Ethereum exchange-traded funds saw another $145 million in outflows on Monday, continuing a troubling trend for the second-largest cryptocurrency. This follows last week’s $311 million in withdrawals, suggesting institutional investors remain cautious despite Ethereum’s modest 0.5% daily gain. The cryptocurrency was recently trading around $3,973, which puts it 2.3% higher than last week but still 9.5% below its price from a month ago.
Bitunix analyst Dean Chen noted that “persistent redemptions in recent sessions indicate that passive institutional selling remains active, while shrinking leverage and forced liquidations have increased near-term fragility.” The situation appears more challenging for Ethereum than Bitcoin, as BTC funds lost only $40.4 million yesterday after experiencing massive $1.2 billion outflows last week.
Institutional Preference for Bitcoin
Nic Puckrin, crypto analyst and co-founder of The Coin Bureau, observed that institutions seem more comfortable with Bitcoin than Ethereum. “ETF flows suggest that Bitcoin remains the most trusted crypto asset for institutions, and its dominance remains close to 60%,” he explained. “So it’s no surprise that Ethereum ETFs are suffering more.”
This institutional preference creates additional headwinds for Ethereum, which has been struggling to maintain momentum amid broader market uncertainty. Puckrin did offer some hope, noting that although crypto investors are showing signs of fatigue, “any positive news could reverse that quite sharply.”
Inflation Report Looms Large
The delayed U.S. Consumer Price Index report, now scheduled for October 24 due to the government shutdown, has become the key focus for market participants. The Bureau of Labor Statistics confirmed the September CPI report would have been released last week if not for the shutdown.
Chen outlined the potential scenarios: “From a macro perspective, a stronger-than-expected CPI print could lift the U.S. dollar and real yields, putting renewed pressure on risk assets and potentially sending ETH toward the $3,700 zone. Conversely, a softer inflation reading could trigger short covering and risk-on flows, helping normalize futures basis and drive a rapid rebound.”
Market Sentiment and Volatility Expectations
Jean-David Péquignot, chief commercial officer at Deribit by Coinbase, noted that Ethereum derivatives data supports this cautious outlook. “Overall, ETH options point to elevated volatility expectations around CPI, with a defensive tilt short-term but more optimistic undertones,” he said.
The prediction market Myriad, owned by Decrypt parent company Dastan, shows users correctly anticipated the government shutdown would extend past mid-October. Currently, 60% of users believe the shutdown will become the longest in history, requiring 35 days to surpass the 2018-2019 shutdown record.
Péquignot summarized the market’s positioning: “A soft CPI could trigger bullish reactions by cooling yields and the dollar, supporting ETH retests of resistance. Stronger inflation data might extend consolidation or trigger downside.” This suggests traders are preparing for significant price movements in either direction depending on Friday’s inflation data.
