U.S. demand for Ethereum has declined noticeably over the past week as key metrics signal reduced institutional appetite. ETF flows, Coinbase Premium indicators, and CME basis rates all point toward weakening interest from American investors in the second-largest cryptocurrency by market capitalization.
The slowdown coincides with Bitcoin shedding 2.8% over 24 hours, reaching an intraday low of $108,201. This broader market pressure triggered $832 million in total liquidations, with long positions accounting for $666 million of those losses.
Ethereum ETF Inflows Stagnate
A recent CryptoQuant report quantified the decline, noting that the seven-day average outflow from U.S. spot Bitcoin ETFs reached 281 Bitcoin, marking the weakest reading since April. Ethereum ETF inflows have nearly stalled since mid-August, underscoring subdued investor confidence in the asset.
Lacie Zhang, Research Analyst at Bitget Wallet, attributes the shift to mechanical factors rather than fundamental concerns. "The early wave of Ethereum ETF inflows was driven less by conviction and more by reallocation mechanics, namely the migration from Grayscale's legacy ETHE product," she explained.
The closing of this arbitrage window, combined with Ethereum's underperformance relative to Bitcoin and Solana, naturally cooled ETF inflows according to Zhang. Enmanuel Cardozo, Market Analyst at Brickken, views the outflows as rotation out of high-beta crypto exposure amid new macro uncertainty.
Macroeconomic Factors Influence Institutional Reassessment
Institutional players are reassessing risk given elevated bond yields and fading speculative appetite, particularly around Ethereum's complex valuation narrative compared to Bitcoin. Upcoming rate cuts, a worsening labor market, and Fed Chair Jerome Powell's comments on quantitative tightening add to the macro reassessment underway.
On-Chain Metrics Reflect Reduced Buying Pressure
The declining U.S. demand appears in the Coinbase premium drop, with a steady descent toward zero for both Bitcoin and Ethereum, which CryptoQuant analysts highlighted as reduced domestic buying pressure. Ethereum's six-month CME basis dropped to a three-month low of 3%, indicating weaker demand for leveraged exposure.
Cardozo noted that elevated CME open interest suggests investors have shifted from aggressive positioning to risk management mode, rather than executing full exits. "With the basis nearing zero, institutions are no longer willing to pay a premium for Ethereum exposure, cooling down short-term appreciation expectations," he said.
Long-Term Outlook Remains Positive
Despite bearish short-term data, both experts reaffirmed that the long-term bullish outlook remains intact. "On-chain data doesn't show broad distribution," Zhang said, explaining that “liquidity expansions still drive risk, and this phase reflects rotation, not reversal.” Retail sentiment on prediction markets shows users on Myriad placing a 66% chance that Ethereum hits $4,500 before dropping to $3,000, contradicting institutional signals.