Ethereum Drops Over 5% Amid Crypto Marketwide Selloff

Ethereum experienced a significant price drop of over 5% on August 1, 2025, reaching its lowest level since mid-July, continuing a recent downtrend amid broader cryptocurrency market volatility. Despite this decline, technical analysis indicates Ethereum maintains strong underlying support, trading above key moving averages and showing signs of healthy consolidation, supported by strong institutional inflows, notably a surge in BlackRock's Ethereum ETF holdings. However, the market faced intensified selling pressure on August 2, influenced by macroeconomic factors such as rising U.S. inflation data and cautious Federal Reserve policy signals, which also drove notable outflows from Bitcoin ETFs and increased volatility around large options expiries. Meanwhile, proactive supply management was demonstrated by the USDC Treasury's $55 million token burn on the Ethereum blockchain, aiming to maintain the stablecoin's $1 peg amid evolving U.S. stablecoin regulations. Institutional investors continue to show cautious optimism with measured capital allocations to Ethereum and select altcoins despite regulatory and macroeconomic uncertainties, reflecting a broader trend of capital rotation into large-cap tokens and blockchain infrastructure. This mixed market environment underscores ongoing volatility but also resilience and strategic accumulation in Ethereum's ecosystem.