Institutional Exit? US Investors Are Dumping ETH at a Record Rate

While retail traders hold or accumulate ETH, on-chain data shows US institutions selling Ethereum at a discount.

Ethereum (ETH) broke below the crucial $2,100 price level after a fresh 8% decline amid a severe market correction. On-chain data now points to a major shift in sentiment among US investors.

In fact, those market participants are aggressively de-risking the world’s largest altcoin, even pushing the Coinbase Premium to its most negative reading since July 2022.

Institutional Exit

According to CryptoQuant, the Ethereum Coinbase Premium Index, measured on a 30-day moving average, has fallen to its lowest level since July 2022. The index tracks the price difference between the ETH/USD pair on Coinbase Pro, which is widely used as a proxy for US institutional trading activity, and the ETH/USDT pair on Binance, often viewed as a proxy for global retail participation.

CryptoQuant said that the deeply negative reading on the 30-day basis indicates that selling pressure is largely coming from US entities. While global retail traders may be holding positions or buying into the price decline, US institutions appear to be actively de-risking or exiting their Ethereum holdings.

The analytics platform revealed that the last time the Coinbase Premium Index reached similarly negative levels was during the depths of the 2022 bear market. Based on this comparison, it detailed two possible interpretations. One is that bearish momentum could continue, as US demand, described as an important driver of crypto market rallies, is currently absent, potentially limiting any near-term price recovery.

The alternative interpretation presented is that such extreme negative premiums have historically aligned with capitulation phases, which can sometimes coincide with local market bottoms once aggressive selling pressure is exhausted. CryptoQuant concluded that the $2,100 level represents an important psychological and technical zone, and added that a reversal would likely require the Coinbase Premium to normalize or turn positive.

“As long as US investors are selling at a discount compared to the global market, upside momentum will likely remain capped.”

Another Historical Warning Signal

A sharp increase in Ethereum network activity has further raised questions about potential market risks. Ethereum’s total transfer count surged to 1.17 million on January 29th, in one of the highest recorded levels for the metric, and represents a sudden, vertical rise in transaction activity across the network. Historical comparisons reveal that similar spikes have previously occurred around major turning points in ETH’s price cycle. In January 2018, for example, a comparable surge in transfer counts coincided with the market cycle top and was followed by a prolonged bear market.

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A similar pattern appeared on May 19, 2021, when a sharp increase in transfers aligned with a major market crash and a steep price correction. While high network activity is often associated with growing usage, CryptoQuant stated that rapid and parabolic increases near price highs have historically reflected periods of market stress.

Such conditions can indicate high volatility, large-scale asset movements, or distribution by long-term holders moving funds, potentially to exchanges. Based on these historical precedents, the current spike places the crypto asset in a “high-risk” zone, where past patterns have been followed by notable price drawdowns.