Major altcoin Ethereum has seen a 5% price increase over the past week, following a broader market recovery. This price surge has reignited demand for altcoins among U.S.-based ETH retail traders, as indicated by on-chain data.
However, institutional investors still appear skeptical. They continue to withdraw capital from ETH-backed funds, signaling a lack of confidence in short-term price rebounds.
Ethereum, Coinbase Premium Purchase Surge
The increase in retail interest is evident in ETH's Coinbase premium, which has crossed above zero, indicating increased buying activity among U.S. investors. At the time of reporting, it stands at 0.016.
The ETH Coinbase Premium Index measures the price difference of coins on Coinbase and Binance. When its value exceeds zero, it suggests active buying by U.S.-based investors on Coinbase.
Conversely, if it drops into negative territory, it indicates reduced trading activity on U.S.-based exchanges.
The ETH Coinbase Premium Index reflects market bullish sentiment, showing traders' willingness to pay a premium to purchase coins on Coinbase. In the short term, this could elevate altcoin values, suggesting increasing investor interest.
However, U.S. institutional investors remain cautious. This is evident from the continued capital outflow from U.S.-based spot ETH ETFs, marking seven consecutive days of withdrawals.
The continued outflow of institutional capital stands in stark contrast to the growing enthusiasm among retail traders. This difference suggests that while U.S. retail investors are becoming increasingly optimistic about ETH's short-term outlook, institutional investors remain more cautious due to macroeconomic uncertainties.
ETH Capital Inflow Strength... Bearish Sentiment to Cause Price Decline?
ETH's Balance of Power (BoP) is positive at the time of reporting, reflecting today's market recovery. This indicator measures buying and selling pressure and has risen to 0.57.
This positive BoP indicates capital inflows to ETH exceed outflows, suggesting an accumulation trend. If this continues, it could potentially push altcoin prices to $2,114.
However, if market sentiment turns bearish and ETH retail traders reduce demand for altcoins, it could lose recent gains and drop to $1,395.
