Ethereum price crashed to a key support level as Ethereum open interest declined and exchange-traded fund (ETF) outflows accelerated.
summary
- Ethereum’s price has plummeted 35% from its peak this year.
- Exchange supply has declined significantly in recent months.
- Ether has formed a small double bottom pattern on the daily time frame.
Ethereum supply on exchanges decreases
Ethereum (ETH) tokens have plummeted to a major support at $3,060, down 35% from this year’s high. This is the lowest level since July 16, as the cryptocurrency bear market accelerates.
ETH prices fell as US investors continued to exit their positions. According to data compiled by SoSoValue, the Spot Ethereum ETF has seen an outflow of assets over the past few weeks.
These ETFs have lost assets over the past six consecutive days, with cumulative inflows of about $13 billion. It has lost assets for the past two weeks in a row, bringing its total assets to $20 billion.
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The ongoing Ethereum price crash is due to a continued decline in futures open interest. Interest rates have fallen by more than 50% since October, data shows, indicating a decline in demand. As the crypto fear and greed index eased, it also declined.
Still, despite Ethereum’s continued woes, there is a silver lining. According to data compiled by CoinGlass, the volume of ETH tokens on exchanges is trending down significantly. There are currently 11.96 million tokens on the exchange, down from July’s high of 16.36 million tokens.
Ethereum transaction balance | Source: Coinglass
The decline in exchange balances is a bullish aspect as it indicates investors are moving their tokens into self-vault. This also means that the selling pressure is not as great.
Ethereum price technical analysis
ETH price chart |Source: crypto.news
The daily chart shows that ETH price has been in a strong downward trend over the past few months. This selloff began when it formed a double top pattern, a common bearish sign in technical analysis.
The coin bottomed at the 50% Fibonacci retracement level. It is below the 50-day and 200-day exponential moving averages. The two means are about to cross each other in a process known as death crossing. Ethereum price is still below the supertrend indicator.
On the positive side, the coin has formed a small double bottom pattern at $3,060 and a neckline at the 38.2% retracement at $3,600. It also bottoms out with a strong Murray math line, pivot, and reverse.
Therefore, the chances of the token sustaining the $3,060 double-dip and rebounding are slim. A move below the double bottom would indicate further downside.
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