Ethereum (ETH) continues to attract institutional interest despite a recent pullback in price. This week alone, more than $1 billion has flowed into ETH investment funds, which highlights growing institutional appetite for the asset.
However, the coin’s price performance does not mirror this bullish investment activity. Despite the heavy inflows, ETH remains under pressure, largely due to increased profit-taking by long-term holders (LTHs).
Ethereum Inflows Hit 11-Week Streak as Price Falls Below $3,600
According to SosoValue, the second-largest crypto by market cap is currently in its eleventh consecutive week of net inflows into ETH ETFs. This is in sharp contrast to Bitcoin (BTC), which has witnessed notable net outflows recently as its price decline appears to have shaken investor confidence.
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Total Ethereum Spot ETF Net Inflow. Source: SosoValue
Yet, despite this strong wave of institutional support for ETH, the inflows have not translated into upward price momentum. On the contrary, ETH’s price continues to fall, weighed down by a surge in profit-taking activity.
At press time, the altcoin trades at $3,553, down 5% since Monday. What is triggering this dip?
Smart Money Is Quietly Heading for the Exit
On-chain data shows an uptick in ETH’s Liveliness, which implies that long-term holders (LTHs), typically the most resilient hands in the market, are increasingly selling their coins. At press time, this stands at 0.69.
ETH Liveliness. Source: Glassnode
Liveliness measures the movement of long-held tokens by calculating the ratio of coin days destroyed to the total coin days accumulated. When it falls, LTHs are moving their assets off exchanges and opting to hold.
Conversely, when it rises like this, more dormant tokens are being moved or sold, signaling profit-taking by long-term holders.
Furthermore, on the ETH/USD one-day chart, the decline in ETH’s Smart Money Index (SMI) confirms the selloff among key coin holders. Readings from this indicator show that its value has dipped by 7% since July 20.
ETH SMI. Source: TradingView
Smart money refers to capital controlled by institutional investors or experienced traders who understand market trends and timing more deeply. The SMI tracks the behavior of these investors by analyzing intraday price movements.
Specifically, it measures selling in the morning (when retail traders dominate) versus buying in the afternoon (when institutions are more active).
When an asset’s SMI falls like this, smart money is offloading its positions—and in ETH’s case, this distribution appears to be driven by a desire to lock in gains from its recent rally.
ETH Faces Tug-of-War Between Smart Money Sellers and Dip Buyers
ETH eyes a decline below $3,524 if its key holders continue to sell. If this level gives way, the altcoin could exchange hands around $3,314. A failure by the bulls to offer support at that point could trigger a deeper correction toward $3,067.
ETH Price Analysis. Source: TradingView
However, if buy-side pressure increases, this bearish outlook would be invalidated. In that scenario, ETH’s price could revisit its recent cycle peak at $3,859 and potentially attempt a breakout above that level.
