Market Performance and Investor Sentiment
Ethereum experienced modest gains despite exchange-traded funds shedding $145 million on Monday as investors brace for delayed inflation data amid macroeconomic uncertainties. The second-largest cryptocurrency by market value recently traded at $3,973, reflecting cautious sentiment ahead of key economic releases.
Ethereum posted a 0.5% gain over the past day and stands 2.3% higher than last week's levels. However, the asset remains 9.5% below its price from a month ago, according to crypto markets aggregator data. The mixed performance comes as institutional investors demonstrate hesitation through continued fund outflows.
Institutional Flows and Bitcoin Comparison
Ethereum ETFs shed $145 million on Monday following $311 million in losses last week. In comparison, Bitcoin funds have rebounded more quickly from last week's $1.2 billion outflows, with Bitcoin funds losing only $40.4 million yesterday, according to U.K. investment firm Farside Investors.
Persistent redemptions in recent sessions indicate that passive institutional selling remains active, while shrinking leverage and forced liquidations have increased near-term fragility.
Institutions have demonstrated stronger confidence in Bitcoin than Ethereum, with Bitcoin's dominance remaining close to 60%. ETF flows suggest Bitcoin remains the most trusted crypto asset for institutions, making it unsurprising that Ethereum ETFs are experiencing greater outflows. Despite signs of investor fatigue, any positive news could reverse sentiment quite sharply.
Economic Data and Potential Market Impact
The delayed U.S. Consumer Price Index release, now scheduled for October 24 due to the government shutdown, has become the key systemic risk trigger of the week.
Users on Myriad, a prediction market owned by Decrypt parent company Dastan, correctly forecasted that the U.S. government shutdown would extend past mid-October. The current shutdown has now reached 20 days.
Investors are anxiously awaiting the Bureau of Labor Statistics' September Consumer Price Index report set for release on Friday. A stronger-than-expected CPI print could lift the U.S. dollar and real yields, putting renewed pressure on risk assets and potentially sending Ethereum 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.
Derivatives Data and Volatility Outlook
Ethereum derivatives data echoes this sentiment, with Ethereum options pointing to elevated volatility expectations around the CPI release. The data shows a defensive tilt short-term but more optimistic undertones. A soft CPI could trigger bullish reactions by cooling yields and the dollar, supporting Ethereum retests of resistance levels, while stronger inflation data might extend consolidation or trigger downside movement.