Summary ETH has dropped nearly 40% year-to-date, with a 57% decline since December, reflecting weak market sentiment and declining public interest. Despite a neutral 'Crypto Fear & Greed' index, Ethereum's Telegram and search interest remain low, indicating weak demand and user growth. Capital outflows from digital asset investment products are at record highs, with ETH ETFs seeing consistent net outflows, though Grayscale's mini trust shows modest growth. Given the poor Q1 performance and challenging technical setup, I see no compelling reason to be long ETH despite its low expense ratio. As the market quickly closes in on the end of the first quarter of the year, it has been a rough start to 2025 for Ethereum ( ETH-USD ) to say the least. Down nearly 40% year to date, ETH's recent performance is actually even worse when going back to mid-December: Data by YCharts On December 16th, ETH came within $45 of $4k per coin. In less than three months, ETH's price had fallen by more than 57% percent from the peak in December. Is there any reason for Ethereum holders to exhibit optimism? In this Grayscale Ethereum Mini Trust ( ETH ) article, we'll look at market sentiment, capital flows in the market, and the technical setup for ETH that I'm currently seeing. Market Sentiment For those who want a more fundamental update to Ethereum's network usage, I'd invite readers to check out my iShares Ethereum Trust ETF (NASDAQ: ETHA ) article from early-March. In that piece, I went over the network usage and fee metrics for the blockchain through February. Very little has changed in that regard through the first few weeks of March. Despite the lack of growth in network fees, market sentiment more broadly appears to be improving: Crypto Fear and Greed Index (TrendSpider) At a 49 reading in the 'Crypto Fear & Greed' index on March 20th, market sentiment is showing a swift spike out of bearish territory and puts the overall market sentiment at 'neutral.' For Ethereum specifically, indications are much less rosy: IntoTheBlock Telegram Sentiment - derived from machine learning connotation analysis of Telegram messages by token - is showing very little interest in Ethereum through Telegram going back to December. This could certainly be more indicative of declining Telegram usage than anything else, as Bitcoin's ( BTC-USD ) Telegram Sentiment trends look fairly similar to the chart above. That said, search interest from the general public also shows declining interest over time: Ethereum Search Interest (Google Trends) Worldwide search data for 'Ethereum' shows broad declines in 'interest over time' over the last five years. The index reading for this search interest data has been under 20 since Ethereum's price peak in December. This does not seem indicative of what would be expected with robust demand and user growth. To be sure, it has been capital flows rather than utility truly driving this market for a while. US ETF Supply & Capital Flows Through March 14th 2025, digital asset investment products have seen the worst five week outflow streak on record: CoinShares After another $1.7 billion came out of cryptocurrency investment products last week, the month to date net flow is negative by nearly $2.7 billion and the total net flow over the last five weeks is negative by $6.4 billion. The asset class is dangerously close to negative net flows year to date, and one more week like the one we had through March 14th would do the trick. The early indications through Wednesday do indeed look a bit better. Data tracked by Farside Investors shows nearly $500 million in BTC ETF demand. Ethereum has not been so lucky: Net Flows BTC ETFs ETH ETFs 17 Mar 2025 $274.6 -$7.3 18 Mar 2025 $209.1 -$52.8 19 Mar 2025 $11.8 -$11.7 3 Day Sum $495.5 -$71.8 Source: Farside Investors, $ in millions Ethereum ETFs have seen net outflow each of the first three days during the week of March 17th. The Grayscale Ethereum Mini Trust has seen $17 million in single week outflow through March 19th. However, the overall trend in ETH supply held through the fund remains positive: ETH Coin Supply Trend (TheBlock) At 462.6k ETH-USD held through the fund, Grayscale's mini trust has grown ETH token supply by 1.7% year to date. From an expense ratio standpoint, ETH is the standout in the market with an annual fee of just 15 basis points. The Block The fund is also top four regarding the share of spot ETF volume. ETH has actually seen this grow in recent weeks with share of volume eclipsing 10% every session since March 12th. That said, ETH share of spot ETF volume is still well off highs from late last year. At that time, the fund often had a share of volume in excess of 20%. Additional Considerations As we approach the end of March, we can look at the Q2 seasonality implications for Ethereum. April has historically been the best month for ETH based purely on mean change: ETH Seasonality (TrendSpider) Going back to 2016, Ethereum's mean change in April is 26% and the coin has made a positive return 75% of the time. Though we shouldn't gloss over the fact that Q1 should have been a terrific quarter for ETH based on past seasonality trends as well - and the actual performance between January and March turned out to be quite horrible. My interpretation of Ethereum's technical setup is indecisive: ETH-USD Weekly (TrendSpider) On one hand, we can see the coin hanging on to the 300-week moving average for dear life. On the other hand, I see $2,100 per coin serving as support on weekly closes going back to late 2023. That level was breached on a close the week of March 3rd, failed a back test the week of March 10th, and is currently still under that key level as of article submission on March 20th. I, personally, would not entertain taking a stab at that trade from the long side until we see the coin take back $2,100 on a weekly close. It's entirely possible that the breakdown the week of March 3rd is a fake out and the 300-week MA will indeed hold as support. But at this point, that would just be a guess and not one that I'm going to make today. Closing Summary You could talk me into the merits of a technical bounce for ETH, given how aggressive the selloff has been over the last three months. I find it particularly interesting that investment capital flow for the asset is now quite competitive with that of Bitcoin's year to date. But bear in mind, this is largely coming with net outflows over the last several weeks, and Bitcoin has simply been hit harder in this regard than Ethereum has. The year-to-date investment flows could easily flip to negative if the week of March 17th mirrors what we have been seeing over the last month. While sentiment figures have indeed improved when observed through the 'Crypto Fear & Greed' index, I think the lack of interest in Ethereum through platforms like Telegram and Google Search are fairly troubling. In a way, we have the market we deserve in crypto right now. Usage and user interest are not what have been generally driving coin price action. Rather, capital flows from speculators who expect to sell to someone else at a higher price continue to drive gains (and losses). For tax-advantaged exposure to ETH, traders can do a lot worse than the Grayscale Ethereum Mini Trust ETF at a 0.15% expense ratio. But at this point, I still don't see a compelling reason to be long ETH based on any fundamental trends. Furthermore, I think the technical setup has challenges. Even though Q1 was a really bad quarter for ETH, it can always get worse!
