Ethereum ETFs shed $1B in 3 weeks – Can ETH buyers prevent breakdown?

Ethereum faces renewed downside risk as sellers keep price pinned near the $2,410 support zone. Sellers took over after the loss of $2560 and pushed the price down to $2350, causing significant selling activity.

Although buyers attempted a short-term rebound, they were unable to sustain that bounce and failed at the $2460-$2480 region. As a result, Ethereum [$ETH] is back at the $2404-$2410 area, where sellers may test the bottom again.

In turn, this will likely continue to deteriorate the support of this region.

Sellers had more conviction than buyers in the form of higher volume throughout the entire sell-off process. Also, the current consolidation does not indicate an abundance of buying power either.

A 4-hour closing below $2404 would most likely trigger additional stop-loss orders and create an opening for a breakdown to $2350, then potentially to $2320.

On the flip side, if buyers are able to hold and close above $2450 with larger volume, it would be a sign of increasing demand and open up the possibility of breaking back to $2480-$2520.

Ethereum ETF outflows deepen selling pressure

While Ethereum continues to battle to defend the $2410 level, persistent ETF outflows are eroding another layer of potential buyer support. In addition, 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. This reduction in institutional spot demand is increasing dependence on other buyers.

Unless new demand emerges or materializes, continued withdrawals may increase selling pressure and make recovery above $2450 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.

$ETH long liquidation hits $1.08M

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.

Further partial liquidations and position reductions added losses of $71,270, $28,991, and $30,658. These examples demonstrate that the trader is still being pressured from all sides regarding their current level of exposure.

These forced exits can amplify selling when leveraged buyers rush to reduce risk, although one account cannot confirm broader market-wide liquidations.

All together, Ethereum risks further declines as repeated $2,410 support tests, $319.97 million ETF outflows, and leveraged liquidations weaken buying support. These pressures could overwhelm buyers and expose $2,350 and $2,320 if support breaks.

Final Summary

• Ethereum could fall to $2,350 and $2,320 if selling pressure pushes it below $2,404.

• $ETH faces more selling pressure as ETF outflows reach $319.97 million and leveraged traders suffer liquidations.