Ethereum’s appeal in the crypto world may be fading. Not only because of its lacklustre price action, but also because it is now unpopular.
Everyone is holding back ahead of the Merge, from retail investors to institutional investors. This is having a negative impact on Ethereum.
Following last week’s disastrous meltdown, most ordinary investors participated in a market-wide sell-off. But not institutional investors. They purchased assets that other investors had sold and invested more than £220 million in them.
Litecoin, Tron, and even Cardano were on the list, but Ethereum was not. Ethereum recorded withdrawals totalling £21.4 million, continuing its trend of outflows. Monthly withdrawals increased to £33.5 million, bringing the year-to-date total to £189 million.
The Merge has generated a lot of buzz and fear, which for some individuals is an opportunity before prices skyrocket. Especially now that Ethereum will be PoS. Others believe it will have little influence because major updates in the crypto-space have before failed.
On the other hand, observing investor activity may provide some insight into the route they may take in the days to come. This is on the contrary to bearish conjecture.
Investors are focused on accumulation over the long term. Despite the 9 May crash, all of the ETH sold was bought back within 24 hours on the 17th.
There was some concern among ETH investors. Including among long-term investors who have liquidated their positions significantly in the recent few days.
However, this will not last long, as investors are beginning to recover from their fright. In fact, they will be upbeat about the momentum moving forward.
This is crucial for the price to recover because Ethereum will struggle to stay over £1,600 without investor trust.
Currently, about half of the supply is in jeopardy. This implies that over £100 billion in investor funds must be guarded.