Ethereum ETFs face $1 billion in 3-week losses as ETH buyers struggle to regain momentum
Key Summary
Ethereum ETFs have lost $1 billion in the past three weeks due to weak buying demand and persistent fund withdrawals, threatening the cryptocurrency's recovery. Ethereum faces renewed downside risk as sellers keep the price pinned near the $2,410 support zone.
Precedent & Market Context
The recent outperformance of TRON, Solana, and six other blockchain platforms highlights the ongoing competition and evolution of the blockchain space. This quiet success story underscores the need for Ethereum to demonstrate its own growth and stability to maintain its market share.
Main Event
Ethereum faces renewed downside risk as sellers keep the price pinned near the $2,410 support zone. Sellers took over after the loss of $2,560 and pushed the price down to $2,350, causing significant selling activity. Although buyers attempted a short-term rebound, they were unable to sustain that bounce and failed at the $2,460-$2,480 region. As a result, Ethereum is back at the $2,404-$2,410 area, where sellers may test the bottom again. In turn, this will likely continue to deteriorate the support of this region.
Analysis & Market Impact
Persistent ETF outflows are eroding another layer of potential buyer support. U.S.-based Spot Ethereum ETFs withdrew $319.97 million last week, ending on the 16th of October. The withdrawal was preceded by $689.88 million flowing into these ETFs on the 25th of September. However, subsequent weekly outflows eliminated all of that momentum. Prior to the latest withdrawal, outflows totaled $138.02 million and $542.07 million, respectively. Therefore, cumulative net inflows decreased from $13.94 billion to $12.94 billion, and total assets decreased to $14.95 billion.
Implications & Outlook
Unless new demand emerges or materializes, continued withdrawals may increase selling pressure and make recovery above $2,450 even more difficult. Institutional ETF withdrawals decrease macro demand for ETH. Consequently, high levels of leverage on crypto-native exchanges are increasing downside pressure caused by liquidating individual positions. Ethereum’s decline has exposed the risks of leveraged bullish bets. This comes after one trader suffered a major liquidation. Five hours ago, ETH’s drop forced the closure of a 3,206 ETH long near $2,355.97. This trade resulted in an overall loss of $286,767.