Ethereum Under Siege: Sell Pressure Mounts Amid Declining Activity and ETF Outflows
Ethereum (ETH) is facing significant headwinds as a confluence of factors, including heavy liquidations, dwindling network activity, and substantial institutional outflows, pushes the cryptocurrency below the $3,000 mark. This recent pullback signals a deeper trend than mere short-term price volatility, raising concerns about weakening demand across the market.
On-Chain Metrics and Institutional Retreat
The past week saw Ethereum's price drop by approximately 12%, a performance that lags behind several major assets in the broader market correction. This sharp decline triggered over $200 million in liquidations, marking one of the largest such events in recent months. Beyond price movements, on-chain metrics reveal a cooling in participation, with weekly active addresses falling to roughly 324,000 in December, their lowest level since May. Transaction counts mirror this trend, indicating reduced engagement from both retail and institutional investors. Concurrently, US spot Ethereum ETFs have endured persistent outflows, with BlackRock's ETHA fund leading the charge in more than $224 million in exits over consecutive sessions. Overall, US spot ETH ETFs have seen their total net assets decrease by over $3 billion since mid-December, suggesting a strategic reduction in institutional exposure.
Whale Activity and Technical Downtrend
Further amplifying the bearish sentiment, large holders, commonly known as "whales," have contributed to the near-term selling pressure. On-chain data indicates that a handful of whale wallets collectively sold over 28,500 ETH, amounting to more than $80 million in total value, within a short period. Despite this notable distribution, Ethereum has demonstrated resilience, with buyers consistently defending key support levels around $2,880. However, the technical outlook remains challenging; ETH continues to trade in a medium-term downtrend, consistently below crucial moving averages, while momentum indicators like the Relative Strength Index (RSI) stay below neutral territory, underscoring the prevailing weakness. Analysts point to significant resistance clustered between $3,050 and $3,120. A failure to reclaim this zone could expose ETH to another test of the $2,800 support level. Should this critical support give way, the next areas of interest for a potential bounce or further consolidation are anticipated to be within the $2,400–$2,600 range.
