ETH is facing significant distribution pressure after Ethereum ETFs recorded record outflows, along with a sharp drop below 3.6K USD.
The slight recovery after a 10% correction shows that demand has not disappeared, but the decline in Open Interest and the number of whale addresses makes ETH's outlook sensitive, especially when institutions begin to take profits and shift capital.
MAIN CONTENT
Ethereum has just experienced record outflows from ETFs, leading to increased selling pressure.
The market saw Open Interest drop by over 10 billion USD, reflecting a risk-hedging sentiment.
Although ETH rebounded slightly, the risk continues if institutional capital continues to exit and whales reduce accumulation.
What early distribution signals is Ethereum facing?
Distribution signals clearly appear when ETF cash flow significantly declines and ETH price drops below the 3.9K USD range, indicating selling pressure from large investors and institutions.
"Ethereum ETF cash flows withdrawing over 500 million USD in just one day is an extremely sensitive sign of short-term risk sentiment, indicating that institutions are shifting to a hedging state."
SoSoValue, ETF cash flow data, 2025
Distribution signs include sharp decreases in Open Interest, a 10% price correction, and withdrawal actions from large funds like Fidelity and BlackRock. The profit-taking action follows a strong recovery phase from 3,500 to 3,900 USD, and now ETH price has dropped back to the 3,600 USD range, indicating that the uptrend is facing obstacles.
Additionally, the reduction of whale addresses by 164 in 30 days also confirms that distribution pressure is still present. This makes the forecast of ETH's next direction difficult to predict and heavily dependent on institutional capital flow and whale behavior.
What does the record outflow of Ethereum ETFs signify?
An outflow of more than 500 million USD/day from ETFs is an unprecedented level, signaling that institutions are shifting their expectations or hedging short-term risks in ETH.
"The sudden shift from continuous inflow in July to massive outflows reflects a significant change in institutional investor sentiment, especially during times of strong market volatility."
Cryptocurrency ETF report, SoSoValue, August 2025
Compared to previous months, inflows into ETH ETFs were quite steady until the end of July 2025. However, after a strong market correction, capital reversed immediately, causing ETFs to record a record outflow in one day, exceeding 500 million USD (SoSoValue data).
Capital outflows from ETFs are often an early move by funds to balance their risk balance sheets, while also putting pressure on the underlying market price as institutions sell ETH to repay ETF shares. This trend increases selling pressure and could trigger liquidation events on exchanges if prices drop significantly.
How does a drop in Open Interest of over 10 billion USD affect the Ethereum market?
The Open Interest of the ETH Futures market decreased by more than 10 billion USD in 10 days, significantly increasing the market's risk-hedging response, reducing speculative capital pressure and liquidity on weak positions.
"When Open Interest decreases sharply, most speculators have been eliminated - this reduces market risk but also significantly weakens short-term buying power."
Glassnode, On-chain market report, 2025
Open Interest is an indicator reflecting the total capitalization of open derivative orders. The decrease of more than 10 billion USD in just 10 days reflects a wave of liquidations and risk-hedging position closures, showing a clear "sell-off" sentiment from institutions and traders. This temporarily reduces market liquidity while increasing spot selling pressure.
This event is also accompanied by two consecutive sessions recording realized profit above 1 billion USD - a factor indicating profit-taking actions rather than panic selling. In the context of sharply declining Open Interest, the ETH Futures market is currently in a healthier state in terms of risk, but short-term growth expectations are also more cautious.
What is the price behavior of ETH after a 10% correction and how does demand react?
After a 10% correction from the peak, the market quickly recorded a nearly 4% recovery, reflecting that bottom-fishing demand is still strong.
"Despite the strong selling wave, the fact that ETH rebounded by 4% in the following week shows that bottom-fishing demand is still very strong - especially at strategic support zones."
TradingView, ETH/USDT data, August 2025
The 9.67% drop this week marks the first red week for ETH after a strong rally, coinciding with significant liquidations in the Futures market. Nevertheless, ETH price quickly rebounded nearly 4%, confirming that there is still demand when it reaches the strong support zone of 3,500 USD.
However, this recovery faces significant challenges if institutional capital continues to exit. According to statistics on Binance, the proportion of long orders has exceeded 60% - reflecting the optimistic sentiment of the majority, which could lead to strong market volatility if selling pressure suddenly increases.
Is smart money really buying in or has it entered the profit-taking phase?
BlackRock bought 23,000 ETH worth 88 million USD during the price correction phase, indicating that smart money is still present in the "buy the dip" phase.
However, at the same time, Fidelity transferred more than 14,978 ETH (53.6 million USD) to Coinbase Prime - a sign of preparing to take profits at a time when risk investment capital is limited.
These actions reflect that the market is at a crossroads: some institutions choose to buy when prices drop (buy the dip), while others prioritize realizing profits and reducing risks. The actions of funds like BlackRock and Fidelity will influence the overall sentiment and capital flow trends in the near future.
Are Ethereum whales withdrawing from the market?
The number of ETH whale addresses decreased by 164 in 30 days, which is a warning sign of the withdrawal of large short-term funds.
The simultaneous withdrawal of ETH by whales often leads to a risk-hedging sentiment among smaller investors, adding liquidity pressure when prices are volatile. Data from Glassnode shows a sharp decline in whale numbers along with a drop in Open Interest, highlighting the trend of short-term risk hedging.
However, some institutions still choose to accumulate ETH as prices fluctuate, creating a tug-of-war between bottom-fishing demand and profit-taking selling pressure. Whale behavior will continue to be closely monitored by the market to evaluate ETH price fluctuations in the near future.
If capital continues to flow out, does Ethereum have to face a large liquidation?
If large cash flows, especially from ETFs and whales, continue to withdraw, Ethereum risks encountering a liquidation cascade at the 3,500 USD zone with over 60 million USD in liquidity at risk of being liquidated.
The liquidation effect occurs when prices sharply drop and hit large stop-loss levels on Futures exchanges. According to CoinGlass, the area around 3,500 USD is accumulating a thermal contract volume of 60 million USD that could be liquidated, creating strong sell-off effects if prices continue to drop.
In the event of prolonged negative developments, the 3,500 USD area will be the deciding zone for ETH's short-term resistance, as well as a psychological test for large Margin investors.
Does the current ETH market still have "legs" or will it break when selling pressure increases?
The 4% rebound after a 10% correction proves that the ETH market has not completely broken down, and there is still buying demand. However, developments depend heavily on the trend of institutional capital and whales in the near future.
If these cash flows continue to withdraw, ETH will face significant liquidity pressure and is likely to experience a liquidation cascade. But if the demand from smart investors remains, ETH could recover after the current "shaking" phase.
Therefore, in the short term, ETH is at a sensitive equilibrium, with the 3,500 USD zone being a crucial point to verify investor endurance as well as absorb selling pressure from institutions and whales.
Comparison table: The impact of key factors on ETH price volatility
Factors Positive Impact Negative Impact Supporting Data ETF Cash Flow Strong inflow supporting price increase Large outflow creating selling pressure Over 500 million USD/day outflow (SoSoValue, 08/2025) Open Interest High OI reflects growth expectations Sharp OI decrease reduces speculative demand Decreased over 10 billion USD in 10 days (Glassnode) Whale Accumulation Whales buying creates price foundation Whales selling causes liquidity pressure Decrease of 164 whale addresses/30 days Buying Demand 4% rebound, bounce from support If not maintained, will lose recovery momentum TradingView data, August 2025
Frequently asked questions about ETH volatility and ETF, whale cash flow
Why does a significant outflow of ETF capital have a large impact on ETH price?
ETF cash flow represents institutional capital. When withdrawing significantly, institutions sell underlying ETH, increasing supply in the market and creating clear downward pressure.
What does a deep reduction in Open Interest usually lead to in the market?
Decreased Open Interest reflects closed speculative positions, making the market less risky but also losing short-term growth momentum, reducing speculative liquidity.
Why is the decrease in the number of ETH whales being observed?
As whales reduce accumulation, the market fears that the withdrawal of large cash flows will lead to strong selling pressure, especially during price declines or negative sentiment.
Could the ETH market rebound if institutional capital stops withdrawing?
If institutional capital stops withdrawing, demand could be restored, helping ETH avoid a large liquidation and strongly recover at key support zones.
What signs indicate that ETH still has strong buying demand?
After a strong correction, ETH still rebounded nearly 4%, with long orders dominating on Binance, reflecting that buying pressure still exists.
What major risks is ETH facing in the short term?
ETF cash flow and whales simultaneously withdrew, combined with a sharp decrease in OI, creating the risk of a chain liquidation around 3,500 USD and the risk of losing short-term support.
If ETF capital continues to be withdrawn, will ETH drop significantly?
If large capital continues to exit, selling pressure will increase sharply and ETH may face liquidation effects in the Futures market, leading to deeper declines.
Source: https://tintucbitcoin.com/ethereum-giam-manh-tuong-lai-ra-sao/
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