Ethereum’s run toward a new all-time high (ATH) is colliding with shifting sentiment in prediction markets, where traders are recalibrating their bets on whether the cryptocurrency can cross the $5,000 milestone before the end of August.

Over the weekend, users on Polymarket saw a 64% chance of ETH hitting $5,000 by month’s end. However, updated data as of August 18 shows those odds have cooled to just 26%, reflecting uncertainty following some volatile price action over the past day that saw the asset’s value dip by a couple of hundred bucks.

Change in Sentiment

Bets on ETH hitting $4,800 before September now hold a 47% chance, down from earlier projections near 90%. And while the $5,000 target appears less certain, the market has still assigned a 74% likelihood to the primary altcoin going above $4,500 in the next two days. At the time of this writing, the coin was trading at around $4,335, down more than 5% in the last 24 hours.

Such is the change in mood that just 27% of bettors on Kalshi currently think ETH can hit a new ATH before September, down from about 91% that were rooting for the asset mid-last week, when it flew past $4,700.

Meanwhile, on Polymarket, approximately 7% of traders hold the belief that ETH could fall below $3,300, with 1% thinking it could reach its lowest point at $2,400.

The sharp drop from the earlier exuberant pricing reflects a more cautious tone by crypto punters, following unexpectedly high U.S. Producer Price Index (PPI) data on August 16, which rattled broader markets and contributed to ETH retreating from its recent high near $4,776.

Over the past week, the altcoin gained 1.4%, but its monthly performance remains solid at over 20%. In that period, ETH also significantly outperformed Bitcoin (BTC), with the ETH/BTC ratio climbing above its yearly average, a historical signal of a bullish cycle for Ethereum against its larger peer.

Broader Market Context

Despite the short-term jitters, the worlds second-largest cryptocurrency is still attracting institutional inflows. According to Santiment, Ethereum saw more than $2.8 billion enter exchange-traded funds (ETFs) in just five trading days.

Additionally, companies like Bitmine and SharpLink have boosted their reserves in ETH rather than BTC, with SharpLink alone now holding more than $1.65 billion worth of ETH, per Arkham data.

At the same time, analysis by CryptoQuant shows rising Ethereum inflows to exchanges and record trading volume relative to BTC, signs that some traders may be preparing to take profits after the recent rally. This is supported by increased volatility seen in futures markets, where liquidation clusters around $4,200 and $4,800 suggest that both upside breakouts and downside flushes remain possible.

In the bigger picture, Ethereums failure to break its 2021 high of $4,878 leaves room for optimism. Unlike Bitcoin, which already set fresh records above $124,000 this month, ETH is still chasing its cycle peak, giving it more potential for an uptick.