On October 21, the Ethereum market experienced significant volatility on Monday, with Ethereum (ETH) perpetual contracts plummeting 3.76% in a single day, falling below the psychological threshold of $3900 to a low of $3878.49. Real-time data from XBIT Wallet indicates that Ethereum's 24-hour trading volume reached $38.271 billion, setting a recent record. Concurrently, U.S. spot Ethereum ETFs saw a net outflow of $145.99 million yesterday, serving as a core catalyst for this decline. This outflow marks the largest single-day withdrawal in nearly two months, reflecting institutional investors' cautious stance towards short-term market dynamics.

The large-scale outflow from U.S. spot Ethereum ETFs has become a focal point of market attention. According to XBIT's reports, the single-day net outflow of $145.99 million surpassed market expectations significantly. Since the launch of Ethereum spot ETFs this year, the flow of funds has been a crucial indicator of institutional investor sentiment. This major outflow coincided with a sensitive period regarding changes in Federal Reserve monetary policy expectations, highlighting a reassessment of risk asset allocation strategies by institutional players.

Interestingly, while ETFs experienced capital flight, on-chain data depicted a contrasting scenario. Real-time monitoring from the XBIT decentralized trading platform shows that several whale addresses increased their holdings amid the price retracement. Notably, Tom Lee's BitMine company acquired 203,826 ETH during the recent market slump, bringing its total holdings to over 3.2 million ETH, valued at approximately $13 billion. This counter-cyclical buying behavior led to a nearly 9% increase in BitMine's stock price, indicating robust confidence from long-term investors in Ethereum's value.

Macroeconomic environment and policy expectations significantly influence market trends. Reports indicate that the CME’s “FedWatch” tool reflects a 99.4% probability of a 25 basis point rate cut by the Federal Reserve in October, with a cumulative rate cut of 50 basis points by December having a 98.6% probability. While such expectations should favor risk assets, the market has exhibited a counterintuitive reaction. Analysts suggest that the current focus is more on the recession risks underpinning the rate cuts. Nick Timiraos, often referred to as a “voice of the Fed,” noted that as the U.S. Treasury rebuilds its cash balance, bank reserves have dwindled below 13% of total bank assets, reaching a critical “adequate” threshold previously set by New York Fed President John Williams. This signal suggests a tightening liquidity environment, exerting pressure on high-risk assets including ETH perpetual contracts.

Additionally, Trump's renewed comments regarding high tariffs have impacted market sentiment. Following these remarks, Bitcoin briefly fell by 1%, dropping below $111,000, accompanied by a decline in Ethereum prices. Political uncertainty and macroeconomic concerns have led investors to seek safe-haven assets. Notably, the price of spot gold rose by 2% during the same period, reaching a historic high of $4,380.89 per ounce, clearly indicating risk-averse sentiment.

The ongoing U.S. government shutdown, now entering its fourth week, has also adversely affected the cryptocurrency market. Reports suggest that the U.S. Senate plans to vote to end the shutdown on Monday evening and will hold a roundtable discussion on cryptocurrency market structure legislation on Wednesday. The government shutdown has limited the SEC's operations, causing delays in the approval processes for several cryptocurrency ETFs, thus amplifying market uncertainty.

Market sentiment has shifted towards caution, with technical indicators showing oversold conditions. According to Glassnode, Bitcoin experienced a sharp decline from $115,000 to $104,000 last week, provoking defensive rotations across the market amid this rapid downturn. The report particularly notes that spot trading volumes diminished during the sell-off, while open interest in the futures market plummeted, and financing rates declined, signaling that traders are shifting towards risk aversion.

XBIT's technical analysis indicates that ETH perpetual contracts are currently in an oversold zone. The 4-hour candlestick chart reveals a MACD histogram that remains positive yet is shrinking, suggesting weakening bullish momentum; meanwhile, the KDJ indicator shows a value of 92, indicating overbought territory but with a descending trend. Based on XBIT’s technical analysis model, the critical support level for ETH is at $3801, while resistance is at $4069. Should the price drop below the $3801 support, it may further decline to the secondary support level of $3772.

Despite the overall cautious market sentiment, some highly leveraged traders remain active. Data shows that prominent investor "Maji Dage" Huang Licheng deposited $100,000 USDC into Hyperliquid, continuing to leverage his 25-fold long position in ETH. Currently, he holds 2,575 ETH, valued at approximately $10.14 million, with an opening price of $3955 and a liquidation price of $3843.56. This high-leverage position indicates some market participants' expectations for a short-term rebound while also underscoring the current high-risk nature of the market.

Discrepancies among institutions and market outlook are evident within the ETH perpetual contract market. On one hand, the massive outflow from U.S. ETFs reflects a cautious attitude from traditional financial institutions; on the other hand, crypto-native institutions and high-net-worth individual investors are accumulating positions contrary to market trends. This divergence highlights differing long-term value assessments of Ethereum among investors.

From a technical standpoint, XBIT indicates that after this round of adjustments, the forces between bulls and bears in ETH perpetual contracts are tending to balance. If prices can hold above the crucial support of $3801 and break through the resistance at $4069, a new bullish trend could emerge. However, breaking below the support may trigger deeper technical adjustments.

Capitalizing on its decentralized architecture advantages, XBIT not only provides real-time market data but also integrates multidimensional macroeconomic indicator analyses, enabling traders to comprehend the potential impacts of policy changes on the ETH perpetual contract market more effectively. Looking ahead, market participants are closely watching the forthcoming U.S. CPI data and the Fed's policy decisions. Analysts believe that Ethereum perpetual contracts may continue to maintain a volatile pattern until macro uncertainties are resolved. During this phase, investors should prioritize risk management, control leverage levels prudently, and avoid unnecessary losses in a highly volatile environment. Concurrently, long-term value investors may look for allocation opportunities arising from price corrections but need to ensure robust capital management and position control.