Ethereum has been experiencing significant selling pressure recently, with its price struggling to find stability amidst broader market weakness. The asset has revisited the $2,100 zone, a critical level that traders are closely watching for potential demand signals. Despite some occasional relief bounces, the overall momentum remains fragile, indicating ongoing uncertainty in both derivatives and spot markets.

A recent report from CryptoQuant highlights a pivotal shift in investor behavior, particularly among U.S.-based participants. The Ethereum Coinbase Premium Index, measured on a 30-day moving average, has plummeted to its lowest point since July 2022. This index compares ETH prices on Coinbase—often a proxy for institutional flows in the U.S.—against global exchange benchmarks like Binance. Sustained negative readings suggest stronger selling pressure from U.S. entities relative to the broader market.

This decline in the Coinbase Premium indicates that institutional demand may currently be subdued, with many investors cutting back their exposure due to volatile macro conditions and a declining appetite for crypto risk. Historically, such sharp negative premiums have occurred during times of market stress, sometimes signaling stabilization phases, even if they don’t consistently indicate immediate market bottoms.

The report further notes that the last time the Ethereum Coinbase Premium 30-day moving average reached similarly negative territory was during the deepest phase of the 2022 bear market. Such readings typically reflect a significant imbalance between U.S. and global demand, as American investors either reduce their exposure or stay on the sidelines. Given the crucial role U.S. institutional flows have played in past crypto rallies, this lack of demand could hinder the chances of a sustained recovery in the near term.

However, the signal is not entirely bearish. Extreme negative premiums have often coincided with capitulation phases, where aggressive sellers deplete available supply. Under these conditions, the market can stabilize as selling pressure diminishes, even before new inflows begin to materialize. This makes the indicator context-dependent rather than a definitive directional signal.

From a technical analysis perspective, the $2,100 level is psychologically and structurally significant. If Ethereum can hold this zone, it may suggest that demand is beginning to absorb supply, despite the prevailing negative sentiment. Yet, a durable trend reversal typically requires confirmation from spot demand metrics.

A normalization—or eventual return to positive territory—in the Coinbase Premium would signal renewed institutional participation. Without this, the market could remain precarious. The price action on Ethereum's daily chart reflects a clear deterioration in market structure following a rejection from the $4,000–$4,800 distribution zone earlier in 2025. Since then, ETH has entered a sustained downtrend characterized by lower highs and persistent selling pressure.

The recent breakdown below the $2,300 region has intensified the bearish momentum, with prices now testing the critical psychological support at $2,100. This level is technically significant as it previously acted as a consolidation zone during earlier phases of the cycle. However, the rapid decline towards it, coupled with rising sell-side volume, suggests that market participants are more focused on risk reduction than on accumulation.

Moving averages further reinforce the bearish bias for Ethereum. The short-term average has crossed below the medium-term line, while prices remain well under the long-term trend indicator. This pattern confirms structural weakness in the market. Unless ETH can reclaim the $2,400–$2,600 range swiftly, any rallies are likely to be perceived as mere relief bounces rather than indicators of trend reversals.

If the $2,100 support fails decisively, it could open the door for further declines, with the next significant support potentially emerging in the $1,800–$1,900 zone, where historical demand has previously stabilized price action. As traders navigate this uncertain landscape, keeping a close eye on institutional demand and market sentiment will be crucial in determining Ethereum's next moves.