Asia Market Open: Stalled Crypto Rally Turns Focus to Ethereum Fund Flows

Crypto Rally Cools as ETF Inflows Fade; All Eyes on Ethereum to Lead Market Direction

The crypto market has entered a cooling phase as institutional demand eases and leveraged bets remain elevated. With ETF inflows plunging and Bitcoin struggling to break above $120,000, analysts say Ethereum could be the key to whether the market rebounds—or loses further momentum.

Bitcoin (BTC) is currently trading around $118,000, consolidating within a range after briefly brushing record highs. According to Glassnode, ETF inflows have dropped sharply—down 80% this week to $496 million—alongside a pullback in trading volumes to $18.7 billion, signaling reduced institutional participation.

The BTC Relative Strength Index (RSI), which measures overbought or oversold conditions, has declined significantly, pointing to a weakening bullish trend. The data supports the view that institutions are now taking profits and stepping to the sidelines.

Derivatives Show Risk Caution

QCP Capital noted a shift in derivatives market sentiment, where funding rates for perpetual futures remain elevated at over 15%, reflecting long positioning. However, there’s been a rise in downside hedging activity. Notably, a large ETH call spread was closed out and significant BTC put options were bought for protection.

Still, QCP maintains a cautiously bullish stance. “Momentum and macro conditions are still favorable,” the firm wrote. “We believe dips will continue to be bought by institutions and long-term holders, as seen last Friday.”

Ethereum Holds the Balance

Ethereum (ETH) is trading at $3,783, holding an inverse head-and-shoulders pattern targeting $4,300. Despite the technical setup, traders remain cautious, with neutral funding rates and resistance near multi-year highs.

Market maker Enflux sees the current environment as a period of consolidation, not capitulation. “The spot and derivatives markets are holding steady,” the firm noted. “The next major move will likely depend on how institutional flows into ETH and altcoins evolve.”

If ETH can attract fresh capital, it could spark a rotation back into altcoins and reignite the rally. If not, the current pause may turn into a deeper market retracement.

Macro Environment Turns Risk-On

Outside the crypto space, macro sentiment has turned more optimistic. A new U.S.-EU trade agreement lifted risk appetite, dragging gold prices down 0.7% to $3,313.57, their lowest level in nearly three weeks. Asian equities opened weaker, with Japan’s Nikkei 225 falling 0.61%. In the U.S., the S&P 500 closed flat, as markets await earnings and the next Federal Reserve decision.

Market Summary

• BTC: Hovering at $118K, trading within a consolidation range between $114K–$123K after a whale-driven liquidity sweep stalled gains.
• ETH: Trading at $3,783, showing bullish structure but caution near resistance.
• Gold: Down to $3,313.57 amid fading safe-haven demand.
• Nikkei 225: Declined 0.61% as regional traders assess global trade outlook.
• S&P 500: Ended flat, with little reaction to the trade deal.

Outlook
With ETF inflows drying up and leveraged positions still high, the market is waiting for a catalyst. Whether Ethereum can reignite momentum will likely determine whether this pause is just a breather—or a turning point.