Ethereum price he slid deeper into a bearish structure that has intensified over the past week. A combination of weakening momentum, robust ETF outflows and sales from long term holders lowered the price of Ethereum at a pace that raised concerns that the cryptocurrency was preparing for a deeper correction.
The recent decline has put our eyes back on the $3,000 area and begs the question whether… the dynamics behind this deterioration is robust enough to force another drop below $3,000.
Ethereum price falls below moving averages as ETF outflows deepen
Up-to-date data from 10x Research discovers it Ethereum is currently trading well below the 7-day and 30-day moving averages, confirming a clear shift towards bearish momentum. The latest weekly change shows a decline of -6.6%, with the price not returning to the short-term trendline at any point during the selloff.
A chart provided by the research firm illustrates the fluctuations in the ETH-USD rate in early November as both moving averages curved downwards, indicating that the market structure has completely weakened.
This technical deterioration comes at the same time as the Ethereum ETF market is experiencing one of its toughest buyouts in history. According to data from SoSoValuespot ETH ETFs have seen net outflows of over $1.4 billion since the beginning of November, signifying a definite shift in institutional appetite.
The combination of continued selling pressure and shrinking ETF demand has created a feedback loop that continues to depress ETH whenever each level of price support fails.
XRP Price Chart. Source: 10X Research On X
Long-term holders are selling at the fastest rate in 2021, but whales are on the rise
Chain flows illustrate a stressed ecosystem. The data shows that long-term ETH holders, i.e. wallets that have held coins for three to ten years, are currently selling at the fastest pace since 2021. This group is known to be dormant during most phases of the market, so their recent activity has increased introduced a robust wave of supply which the stock exchanges have struggled to absorb.
However, the dynamics are not entirely one-way. On-chain data shows that several immense whale portfolios have entered aggressively during the downturn and bought hundreds of thousands ETH worth over $1 billion.
Meanwhile, the scale of accumulation was not immense enough to counter broader selling by long-term holders or ETF outflows, leaving Ethereum’s price trapped in a downtrend channel.
Ethereum is currently trading at around $3,182, but its daily low has reached as high as $3,023. It goes away very little margin in between current level and support zone at $3,000. If sellers continue to dominate and push the price below the $3,150 to $3,200 range, a direct drop to $3,000 will become increasingly likely in the modern week.
Featured image created with Dall.E, chart from Tradingview.com
