Ethereum ETF Outflows Accelerate as Nansen Says Bullish Catalysts Have Vanished
Summary
- Ethereum was reported to have lost its bullish momentum as it risked falling below the $2,000 level, with spot ETF outflows and slowing network activity weighing on the token.
- Nansen said falling gas fees and reduced burning had weakened Ethereum’s deflationary effect, pushing ETH closer to becoming an inflationary asset and undermining the core narrative that drove the previous bull market.
- With monthly net outflows from US spot Ethereum ETFs reaching $522 million, the ETH/BTC ratio falling to 0.027, and realized market capitalization declining to $295 billion, Nansen said a meaningful rebound would require renewed ETF inflows and a recovery in network activity.
Forecast Trend Report by Period
Ethereum is at risk of falling below $2,000 as outflows from spot exchange-traded funds and slowing network activity erode the token’s bullish momentum.
AMB Crypto reported on May 29 that on-chain analytics firm Nansen said in a recent report Ethereum’s weakness reflects not only macroeconomic uncertainty but also structurally weak demand. Ether fell below $2,000 intraday that day for the first time since March. It is now down 19% from its April peak of about $2,500.
Nansen identified weakening network demand as a key problem. Ethereum’s average gas fee has fallen below 2 Gwei, near the low for the current cycle. As user transactions and smart-contract execution decline, the amount of ETH being burned has also dropped. That has significantly weakened the deflationary dynamic that was once central to the Ethereum investment case.
The expansion of Layer-2 networks is also weighing on Ethereum. Much of the transaction activity and fee revenue that previously occurred on the mainnet has shifted to Layer-2s, reducing the economic value of the Ethereum mainnet. “With burn volumes this low, ETH is moving closer to being an inflationary asset again,” Nansen researcher Nicolai Sondergaard said. The core narrative that underpinned investor conviction in the previous bull market has also weakened, he added.
Institutional fund flows have also remained weak. The ETH-to-Bitcoin ratio has fallen to about 0.027, the lowest level in a year. US spot Ethereum ETFs have recorded net outflows since May 11, with monthly net outflows totaling $522 million. That is the largest monthly outflow since December 2025.
Sondergaard said the trend throughout 2026 has been for institutional investor attention to remain focused on Bitcoin. Ethereum has yet to establish the same presence as Bitcoin, he said.
Whale investors, by contrast, have continued to buy during the recent decline. Santiment said wallets holding more than 100,000 ETH now own 17.4 million ETH, equal to about 22% of total supply. That is the highest level in the past 10 weeks.
Even so, overall capital flows remain negative. According to Glassnode, Ethereum’s realized market capitalization has fallen to $295 billion from $310 billion this year. That suggests about $15 billion has left the market.
Nansen said Ethereum needs spot ETF inflows to resume and network activity to recover before it can stage a meaningful rebound. “Ethereum currently has none of the key catalysts that drove previous bull markets,” Sondergaard said. “A rebound will only be possible if at least two positive factors emerge at the same time.”
