Ethereum (ETH) has experienced a sharp 21% decline over the past month, raising concerns among investors about its short-term future. However, despite the recent sell-off, there are emerging signals that ETH could be poised for a recovery. Retail investors in Korea and the U.S., along with derivatives traders, are showing renewed buying interest, which could help Ethereum reclaim lost ground in the coming weeks.

At the time of writing, Ethereum is down 0.49% on the day. The Ethereum spot ETF, which initially saw strong buying pressure, has faced increasing sell-offs, but traders remain hopeful that a rebound could be imminent.

Institutional Investors Cashing Out ETH

Recent data from Glassnode indicates that institutional investors have started taking profits, contributing to ETH’s decline. Between February 10th and 15th, the Ethereum spot ETF saw a net outflow of approximately 14,000 ETH, valued at around $37.7 million based on Ethereum’s press-time price of $2,695.

This selling pressure came after ETH had a strong rally earlier in the month, mirroring a pattern seen in December 2024, when large investors locked in profits after a bullish run. If this trend continues, ETH may remain under pressure unless fresh institutional demand emerges.

However, market watchers suggest that with the new trading week beginning, institutional investors could resume buying, particularly if Ethereum shows signs of stabilizing above key support levels.

Korean and U.S. Retail Investors Remain Bullish

While institutional investors have been cashing out, retail investors have remained optimistic. Two key indicators highlight this trend:

• The Korea Premium Index, which measures ETH demand on Korean exchanges compared to global markets, has stayed above zero since December 14th. At press time, it read 4.7, a highly bullish signal indicating strong demand for Ethereum in South Korea.
• The Coinbase Premium Index, which tracks Ethereum demand from U.S. retail investors, also showed continued accumulation, with a reading of 0.02. Though not as strong as the Korean market, this suggests that retail investors in the U.S. are still accumulating ETH, even as larger institutions take profits.

If this buying activity continues, it could offset institutional selling pressure, potentially pushing ETH’s price back toward key resistance levels.

Derivatives Market Shows Positive Signs

Another encouraging sign for Ethereum’s potential recovery comes from derivatives traders, who are actively placing bullish bets on ETH.

• The Taker Buy-Sell Ratio, which measures buy volume versus sell volume in derivatives trading, recently stood at 1.033. A ratio above 1 indicates that more traders are buying ETH contracts rather than selling, signaling renewed bullish sentiment.
• The Funding Rate, a measure of demand in perpetual futures contracts, has also turned positive, settling at 0.0090. A positive funding rate indicates that traders are willing to pay a premium to maintain their long positions, suggesting confidence in a potential price recovery.

If derivatives traders continue buying at this rate, it could fuel a stronger recovery for ETH, especially if spot market demand picks up.

What’s Next for Ethereum?

Ethereum’s future price movement will largely depend on whether buyers can overpower selling pressure from profit-taking institutions. Key factors to watch include:

• Institutional sentiment – If large investors resume buying ETH, it could provide a strong foundation for a recovery.
• Retail demand – The continued interest from Korean and U.S. retail investors is a key bullish signal.
• Derivatives activity – If derivatives traders remain bullish, it could further support Ethereum’s price recovery.

If Ethereum manages to stabilize and reclaim key resistance levels, it could set the stage for a strong rebound in the weeks ahead. However, if selling pressure persists, ETH may struggle to regain momentum in the short term.