Summary Ethereum has corrected 32% from its August 2025 all-time high, now trading at $3,400 after a period of volatility. Institutional ETF outflows have increased recently, but not at panic levels; overall, institutional and company holdings remain relatively stable. Network fundamentals remain healthy, with Ethereum capturing the majority of new stablecoin flows and maintaining robust transactional activity, despite a recent decline in new users. I see ETH as a long-term accumulation opportunity at a 30% discount from ATH, though short-term downside risk remains amid macro and network headwinds. Price Action & Momentum Ethereum (ETH-USD) went on a bull run from its low on April 9, 2025 ($1,390), to an all-time high on August 24, 2025 ($4,950). Two and a half months later (today), the price of Ethereum has fallen back from that high, down 32%, to reach an intermediate zone marked at $3,400. In this article, I will review what institutional players are doing (ETF flows and balance sheet reserves) and how the Ethereum chain is responding and has responded (stablecoin uptake per chain, activity, and new vs. recurring users). Using these metrics, I will assess whether the long-term bullish thesis remains intact while also discussing the short-term risks. Trading View Institutional Activity Soso Value ETH Strategic Reserve The first thing we're going to do here is look at what institutional investors are doing with Ethereum ETFs, as well as companies that have allocated part of their treasury to ETH to earn staking yield. In the two images above, we can see the overall net inflows and outflows in the different ETH ETFs and by companies holding Ether on balance sheets and by the ETFs. At first glance, it seems that both exchange-traded funds and companies have not materially reduced their holdings. We can see in the second image a slight slowdown in the accumulation of Ethereum (the blue lines (ETFs) and green lines (companies)) show a slight decrease in their slope at a visual level, going from 12,959,000 ETH in August to a current level of 12,745,000 ETH (a decrease of more than 200,000 ETH). We can confirm this by looking at the first chart (ETF flows), This represents the capital inflows and outflows from the pool of existing ETFs for Ethereum. Currently, and since ATH, we have seen episodes of net capital outflows, generally lasting no more than three days. These episodes of outflows (August, September, and October of this year) have averaged $250 million in daily sales. This pattern broke on October 28, when we started to see a new episode of net capital outflows, but this time more sustained, as it continues to this day (6 days). We will see if it is a simple adjustment of positions, since the outgoing amounts are not typical of mass liquidations, or on the contrary, if ETFs are positioning themselves ahead of another leg lower. Network Perspectives Next we will go on to assess metrics that describe the state of the Ethereum network. Whether there are obvious features of capital turnover or shortage of fresh liquidity. Artemis In this graph we can see the volume of stablecoins flowing between the different blockchains of the entire cryptographic ecosystem. As is clear, there is an upward trend in the last year for the whole sector. This is because stablecoins (issued against cash or short-term US Treasury securities) are on the rise. This issuance indirectly finances the U.S. Treasury, as stablecoin issuers buy short-term Treasuries to back new tokens. Once we understand this, we return to the image above to see which network the new stablecoins are going to. As shown in the image, it is the Ethereum network that dominates the market in this regard, with a clear trend of increasing dominance over the last year (the blue bars represent a higher percentage in recent times: currently, its dominance share stands at 56%). This means that of the new percentage of stablecoins issued, the Ethereum network currently captures 56% of the new amount, which provides long-term stability, constant activity, and a network effect. All of this tells us that in the stablecoins aspect, the Ethereum network is in good health right now. Artemis The next step is to see the transactions made by users within the Ethereum network to confirm whether the comments in the stablecoins section are confirmed with this data. In this case, we show the historical evolution of the number of transactions broken down by activity in the network. As we can observe, the local minima of the series coincide with episodes of local minima of price (April 2025), and the local maxima with local maxima of price (August 2025). This is because the activity index is closely related to the price of this type of asset (the 90-day correlation coefficient is 0.68, which explains this relationship), since the greater the activity on the network, the greater the turnover of assets there will be, the greater the gas consumed in this case, which can make ETH net supply disinflationary/deflationary under its issuance-and-burn mechanism (EIP-1559), for how it is built. Broadly speaking, we see that transactional activity has declined over the last two months (the weekly average of transactions in the first two weeks of August was 740,000 transactions per week, which, compared to the current average of 560,000 transactions per week, gives us a 25% decline in transactional activity), with a sustained decline in transactions in the “Uniswap” category (red bars: 30,000 transactions on average during August compared to 8,000 currently, a decline of more than 60%). This has been able to influence the price of the asset in a negative way, since the decentralized exchange platform Uniswap is one of the main entry channels to the asset analyzed. On the transactional front, the network is also in good health. Artemis Third, and to conclude the current perspectives of the network, we analyze the evolution of new users who transact within the network compared to recurrent active users, all at a daily frequency. In the last year, recurrent transactionality dominates, leaving new users in second place as punctual actors. In this case, it is useful to study the directionality of the trend and the points where new users increase, since they coincide with moments of high prices (August). Currently, new users have been gradually falling since August, suggesting little new demand, which, added to the partial sales of ETFs in recent weeks and the decrease in burning due to lower transactionality, has put downward pressure on the asset price. The decline has occurred from a total average user level of 4.2 million wallets in the first two weeks of August to a current average level of 3 million wallets transacting with each other within the network. User growth has also slowed, from 1.1 million new users in August to 800,000 new users today, representing a decline of more than 20% in the current growth of new users (wallets) transacting with the network. My Personal View ETH has fallen 32% from its ATH, which can be explained by lower network usage (less gas means less burning and higher asset issuance) and several days of ETF outflows, which do not necessarily represent forced sales or massive liquidation levels. Ethereum continues to attract liquidity in stablecoins, and recurring users are sustaining on-chain activity. In addition, the 90-day price-activity correlation (0.68) suggests that if usage rebounds, the price should follow suit. That is why I maintain a long-term Buy rating, entering slowly and only accelerating if we see inflows into ETFs for several days in a row, burning above issuance, and a rebound in new users trading; if ETF outflows persist or adoption falls, it is better to wait. Looking at the broader macroeconomic factors that influence all risk assets, especially those with higher market beta (Ethereum), I believe we are still in a bullish cycle, as employment continues to grow (42,000 jobs have been created in the US according to ADP), inflation is stable for the moment (3.0% according to the latest official data), and it appears that the Fed's balance sheet policies will soon be relaxed due to the end of QT and the current pressure of the SOFR rate against the IORB (SOFR > IORB at the time of writing). That is why I think this downward movement may be temporary rather than structural. Thank you for reading. EXTRA Readers have two options for acquiring the asset. The first is to go to a centralized exchange, register, and buy the amount of Ethereum they want. The problem with this is that it directly or indirectly incurs the risk of self-custody. If the exchange suffers a hacker attack or the user loses their keys (if it is self-custody in a cold wallet), it will be difficult to recover those assets owned by the user. The second option is to use vehicles such as ETHE or ETHA, which are index funds that replicate the performance of the asset without the user needing to physically own it, freeing them from the risk of self-custody, as the exchange-traded funds themselves subcontract physical custodians to do so.
