The world’s second-largest cryptocurrency is experiencing significant downward momentum this week. A combination of declining network usage and sustained outflows from investment vehicles has pushed Ethereum’s price below the psychologically important $3,000 threshold. This retreat by short-term traders stands in stark contrast to the continued confidence shown by major financial institutions in the blockchain’s long-term potential.
Institutional Confidence Contrasts Retail Exodus
Despite the current price weakness, institutional engagement with Ethereum’s underlying technology remains robust. In a notable show of faith, banking giant JPMorgan recently launched its first tokenized money market fund on the Ethereum blockchain, directly utilizing its infrastructure. Furthermore, on-chain data reveals that only 10% of the total ETH supply currently resides on exchange platforms—a historically low figure. This suggests large-scale holders are not moving to sell. Entities like BitMine are reportedly increasing their holdings counter-cyclically, accumulating during the dip.
U.S. Investors Lead the Sell-Off
Analysts point to activity in the United States as the primary driver behind the slide. Spot ETFs tracking Ethereum have recorded net outflows for three consecutive sessions, with nearly $225 million withdrawn in the latest trading period alone. Market observers also highlight a negative “Coinbase Premium Index,” a strong indicator that selling pressure is originating predominantly from U.S.-based exchanges. At the time of reporting, ETH is trading at $2,931.78, reflecting a weekly loss exceeding 11%.
Should investors sell immediately? Or is it worth buying Ethereum?
Network Activity Shows Concerning Decline
Fundamental metrics are flashing warning signs alongside the price action. The number of weekly active addresses on the network plummeted by approximately 26% in December, reaching lows not seen since May 2025. This steep decline correlates with falling transaction counts, indicating that many participants are moving to the sidelines amid uncertain market direction.
Technical Outlook Hinges on Critical Support Zone
For traders, the chart setup is now paramount. A critical support band has formed between $2,850 and $3,000. A sustained break below this zone could trigger a further decline toward the $2,400 level. Conversely, regaining a foothold above $3,100 is viewed as necessary to stabilize the currently damaged technical picture and potentially halt the corrective phase.
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