Key Takeaways
How are macro conditions affecting Ethereum’s price outlook?
Weak macro sentiment and rising credit spreads are signaling potential downside pressure for ETH.
What does recent ETH accumulation suggest about investor sentiment?
Large-scale ETH purchases and rising on-chain activity indicate growing bullish confidence despite market volatility.
Macro and institutional investors take diverging stances on Ethereum [ETH].
Despite a turbulent start to the week, marked by over $19 billion in liquidations, investors have not exited ETH. Although ETH recorded a modest 4% decline in the past 24 hours, mixed signals continue to cloud its next price direction.
Accumulation and broader macro sentiment appear to be diverging points for ETH, according to AMBCrypto analysis.
Macro sentiment weakens
Macro factors have shown strong correlations with major risk assets in the cryptocurrency market, including Bitcoin [BTC] rejection and Ethereum.
The Excess Credit Spread, an important macro indicator that measures deviations between high-yield bond spreads and their normal levels, has flashed a warning signal.
A high positive yield often suggests that financial market conditions remain unstable, compared to when it turns negative.
Source: Alphractal
This positive deviation has also affected the Russell 2000 index, implying that stock prices could face downward pressure. Notably, changes in the Russell 2000 have historically influenced cryptocurrencies such as ETH.
Crypto analyst Joao Wedson said the market is currently “in a 50-50 position, with some indicators pointing to a top and others showing neutrality.”
He added,
“I agree with what Elon Musk said: we could see a bear market at the end of 2025. Whether it starts now or in December is pure speculation.”
U.S.–China tensions trigger a market reset
A report from CryptoQuant suggested that the U.S.–China trade conflict acted as a catalyst for the shift in market sentiment.
The report, which examined multiple moving averages, found that ETH had closed below the EMA 96, SMA 240, and structural AVWAP (Anchored Volume Weighted Average Price) before President Donald Trump’s announcement.
These technical indicators have historically signaled upcoming market declines.
After the announcement, ETH experienced a sharp drop but quickly rebounded as news of easing trade tensions surfaced, pushing prices back above those key indicators.
Source: CryptoQuant
While macro sentiment was deteriorating, on-chain activity told a different story.
Token Terminal reported that Ethereum transactions reached a new all-time high, confirming active blockchain usage that contributed to sustained ETH demand. Concurrently, gas fees dropped to multi-year lows—an uncommon occurrence during heightened network activity.
These dynamics suggest that demand for ETH remains strong, and a reversal from the recent price dip is still possible.
Ray Youssef, CEO of NoOnes, noted that the recent “leverage flush helped deep-pocketed buyers stay active on dips,” a trend he believes will continue to support ETH prices.
He added,
“A prolonged U.S. government shutdown or further escalation in global trade tensions could halt the Ether-led altcoin recovery rally and trigger a deeper retracement, possibly pushing ETH back to the $3,700 level.”
Investors continue to accumulate ETH
Spot market investors have continued accumulating ETH in large volumes.
In the past 48 hours alone, they have purchased roughly $376.57 million worth of ETH, transferring the tokens into private wallets.
This ongoing accumulation signals growing bullish sentiment and suggests that ETH could be poised for a rebound—reinforcing optimism among market participants.
Source: CoinGlass
