Weak Institutional Demand Dampens Ethereum’s Growth Prospects

Ethereum's institutional demand weakens, hindering growth.

The Coinbase Premium Gap index for Ethereum has turned negative, indicating weak demand from American institutional investors, noted CryptoQuant analyst known as CryptoOnchain.

Bearish Alert for Ethereum: Coinbase Premium Gap Hits 10-Month Low

“Until the price gap returns to positive territory and genuine demand reappears in the US spot market, the probability of a confirmed breakout above the $3,300 resistance remains low.” – By @CryptoOnchain pic.twitter.com/CzPhEuw1MK

— CryptoQuant.com (@cryptoquant_com) January 8, 2026

The 14-day moving average has fallen to -2.285, the lowest since February 2025. The negative price difference between Coinbase and Binance indicates seller dominance on the American platform. The former typically reflects US institutional sentiment, while the latter represents the global retail market.

The weakness of this metric creates a significant barrier to sustaining a price above $3,300. Previously, Ether entered a correction after reaching an October peak of $4,700.

Historically, a sustained rally in the asset has always been accompanied by a positive premium on Coinbase. Current values indicate a lack of interest from “smart money” in accumulating coins at current levels.

The expert warned of risks of further price declines. Without the indicator returning to positive territory and a resurgence of demand in the US spot market, the likelihood of breaking resistance remains low. A bearish divergence is observed—attempts to stabilize the rate contradict the outflow of “whale” capital.

A Fresh Start

Bitcoin began the year with consolidation. According to Glassnode, selling pressure has weakened, and the asset has stabilized at the lower boundary of the current range.

Experts believe the market is transitioning from “defensive deleveraging” to selective risk-taking. This was facilitated by the “clearing” of positions at the end of 2025.

Key observations from analysts:

1. Supply overhang. A large volume of coins is concentrated in the upper price range, restraining breakout attempts. To resume a sustainable trend, the price needs to reclaim key levels.
2. Corporate demand. Companies are buying dips only sporadically, not providing consistent price support.
3. Return of institutions. After outflows at the end of 2025, inflows into spot Bitcoin-ETFs have resumed. The rise in open interest in futures indicates a recovery of activity in the derivatives market.
4. Options shakeout. The market has gone through the largest position closure in history—more than 45% of open interest was liquidated. This removed excess hedging barriers and made the risk picture clearer.

Sentiments and Forecasts

Implied volatility has presumably found a bottom and is starting to rise. The skew indicator is normalizing: the decline in put option premiums and increased interest in calls signal a shift in sentiment from defensive to bullish.

In the $95,000-$104,000 range, dealers are in a “short gamma” position. Such a structure mechanically amplifies upward price movement as the market rises. Participant behavior around the $95,000 strike suggests that bulls are patient and not rushing to take profits.

Glassnode believes that 2026 begins with a healthier market structure and new opportunities for trend expansion.

“Boring Sideways Movement”

CryptoQuant founder Ki Young Ju holds a more restrained position. According to him, capital inflows into the primary cryptocurrency have dried up, and liquidity has shifted to stocks and gold. Despite this, the expert does not expect a deep decline, predicting a period of sideways movement.

Capital inflows into Bitcoin have dried up.

Liquidity channels are more diverse now, so timing inflows is pointless. Institutions holding long-term killed the old whale-retail sell cycle. MSTR won’t dump any significant chunk of their 673k BTC.

Money just rotated to stocks and… pic.twitter.com/Ha866TP857

— Ki Young Ju (@ki_young_ju) January 8, 2026

According to the expert, liquidity channels have become “too diverse,” making it pointless to track exact entry timing. Long-term institutional holders have broken the old cycle where whales sold assets to retail investors.

Ju is confident that Strategy will not offload a significant portion of its 673,000 BTC holdings. The analyst considers it unlikely to repeat past bear phase scenarios where the price fell by 50% or more from peak values.

“In the coming months, we are in for just a boring sideways market. Shorting in hopes of a crash? Good luck with that,” concluded the head of CryptoQuant.

As reported, the total inflow into cryptocurrency exchange-traded products amounted to $47.2 billion by the end of 2025.