Ether Price Climbs Toward $3K Amid CPI Report, But $553 Million ETF Outflow Causes Concern

Ether Price Climbs Toward $3K

Summary:
Ethereum (ETH) is seeing increased prices as it approaches the $3,000 mark, following a favorable US Consumer Price Index (CPI) report. However, the significant outflow of $553 million from US-listed Ether exchange-traded funds (ETFs) raises concerns about the waning interest from institutional investors, as network activity slows down.

Key Takeaways:

Heavy outflows from US-listed Ether ETFs indicate a decline in institutional interest due to falling network fees and reduced demand for staking and leverage.
ETH futures premiums and open interest are down, reflecting cautious market positioning without a definitive bearish trend.

Ether's price fell to $2,800 on Wednesday, leading to $165 million in liquidations from bullish futures positions. The price drop of 13% over the week came alongside substantial outflows from Ethereum ETFs, as investors grew more risk-averse amidst uncertainties in the artificial intelligence sector. The technology-focused Nasdaq index also fell by 1.8% on the same day, intensifying fears of further declines for Ether.

ETH Performance Chart
ETH/USD (blue) versus Total Crypto Capitalization/USD (red). Source: TradingView

Shares of Oracle (ORCL US) dropped 5.5% due to a reported withdrawal of support from Blue Owl Capital (OWL US) for a planned $10 billion data center project. This news negatively affected investor sentiment, contributing to the rising cost of debt protection for Oracle and promoting a more cautious market tone.

The upcoming release of the US Consumer Price Index (CPI) report on Thursday is a key point of interest for risk assets. November's CPI growth of 2.7%, which was lower than expected, allowed Ether to recover to around $2,950. Market analysts suggest that this decline in inflation could lead the Federal Reserve to consider further economic stimulus, especially as the labor market shows signs of stress.

Why Is Ether Price Under Pressure?

Ether's performance over the past week has been underwhelming compared to the broader cryptocurrency market, lagging by 6%. This bearish sentiment is partially linked to the demand for Ether ETFs.

Ether ETF Net Flows
Daily net flows of US-listed Ether exchange-traded funds. Source: Farside Investors

Since Thursday, US-listed Ethereum ETFs have experienced net outflows of $533 million, marking a reversal from inflows seen in the previous two days. Currently, these funds hold ETH valued at $17.5 billion, usually indicative of institutional investor interest. More troubling is the reported decline of 13% in demand for leveraged ETH futures over the last week.

ETH Futures Open Interest
Aggregate open interest in ETH futures. Source: CoinGlass

The aggregate open interest in ETH futures has dropped to $28.1 billion across major exchanges from a high of $32.4 billion on December 10. While a decrease in leveraged positions doesn't automatically indicate bearish sentiment, it does create pressure on bullish confidence, especially with ETH trading 41% below its all-time high of $4,957. Investors are currently looking at the monthly futures premium to assess whether bearish control is emerging.

ETH Futures Premium
Monthly futures premium for Ether compared to spot markets. Source: laevitas.ch

As of Wednesday, Ether monthly futures were trading at a 3% premium compared to spot markets, indicating weak demand for long positions. Under typical market conditions, this premium should be between 5% and 10% to consider capital costs. The decline in activity on the Ethereum network continues to dampen investor expectations for Ether's price.

Ethereum DApps Fees
Weekly fees generated by decentralized applications (DApps) on Ethereum. Source: DefiLlama

Over the last week, fees from decentralized applications (DApps) on the Ethereum network fell to $68 million, down from $98 million four weeks prior. The demand for ETH is closely tied to on-chain activity, with higher usage leading to stronger incentives for long-term accumulation. Additionally, the total Ether locked in staking has decreased to 35.69 million ETH from 35.76 million ETH a month ago, indicating less willingness to hold the asset.

The outflows from Ether ETFs highlight a decrease in investor interest, coinciding with slower activity on the Ethereum network and dwindling demand for leveraged positions. For traders to regain confidence, it is likely that more than just a few days of positive inflows will be necessary, especially given the overall economic uncertainty and increasing risk-averse sentiment in the markets.

Related: Crypto ETPs to enter ‘cheesecake factory’ era in 2026 – Bitwise