Can weak retention and rising netflows derail ETH’s momentum?
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Short-term ETH traders crossed 4 million, a threshold that has historically triggered strong rallies.
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ETH could reclaim $2.8K if demand holds, but poor retention and inflows raise downside risk to $2,448.
A surge in Ethereum short-term investors signals potential for price growth, yet declining retention rates and rising netflows could pose risks.
Short-Term Investor Surge: A Double-Edged Sword for Ethereum
After months of a strong downtrend, Ethereum [ETH] has entered a recovery phase. As such, the demand for the altcoin is on the rise again. In fact, Ethereum’s number of short-term investors has surged over the past day, reaching the critical threshold of 4 million. According to CryptoQuant’s analyst Burak Kesmeci, this is one of the most significant aspects of the altcoin’s potential bull run.
The rise in short-term investors in Ethereum could boost risk appetite for altcoins, particularly Ether, which is the only altcoin with a spot ETF. Its performance significantly influences altcoin and market sentiments, making Ethereum a mini-index for the altcoin bull market.
Source: X
The rise of short-term investors acts as a market catalyst for Ethereum. Periods of significant price increases often align with the number of traders surpassing 4 million, indicating that short-term interest drives these rallies. High demand from new small traders boosts prices, while numbers below 4 million lead to difficulty in sustaining price uptrends, often resulting in declines. For example, in December 2024, when traders exceeded 4 million, ETH prices surged past $4,000, whereas in February 2025, the price fell as traders began to leave.
This trend suggests that 4 million traders is a key threshold for short- to medium-term price movements. Having said that, the growing presence of speculative traders does raise one concern: Are they sticking around?
Although Ethereum short-term investors are rising again, hitting 4 million, the altcoin’s Monthly Cohort Retention Rate has steadily declined. A declining retention rate implies that fewer users are returning month-over-month after rejoining. This leads to lower user engagement, indicating a major challenge for Ethereum. When these new investors enter the market, they are not sticking around.
Source: Artemis
At the same time, Exchange Netflow spiked to 88.2K—its highest in three weeks—signaling a surge in ETH deposits onto centralized platforms. This suggests that traders are aggressively exiting the market with more inflows than outflows.
Source: CryptoQuant
Can ETH reclaim $2.8K?
For now, Ethereum trades just under $2,700. If short-term demand holds and net selling cools off, ETH could target $2.8K, followed by $3,000. However, if retention continues to drop and exchange inflows persist, ETH may lose momentum and slide back toward $2,448.
Conclusion
In summary, the landscape for Ethereum remains dynamic. The recent spike in short-term investors could herald a positive trend, yet underlying issues such as declining retention and surging netflows raise concerns. For Ethereum to sustain its current momentum, both demand and user engagement must be prioritized. Investors should remain vigilant as the situation evolves.
