Ethereum Price May Drop Further as Wall Street Sells
There are signs that US investors are rotating from the crypto industry and pumping their cash to the booming stock market. Data shows that spot Ethereum ETFs have continued experiencing substantial outflows this year.
These ETFs suffered a $4.95 million in outflows on Friday, bringing the weekly losses to $14.9 million. The funds have lost over $187 million in assets this month, bringing the year-to-date net outflows to $1.1 billion.
The same is happening with Bitcoin (CRYPTO: BTC), whose ETFs have lost over $3 billion this year.
Ethereum ETFs have lost assets as investors have started to capitulate after the recent performance. For example, Ethereum has dropped by 34% in the last five years, while the S&P 500 Index has jumped by over 78%.
There are also signs that Ethereum is losing momentum in key areas this year. For example, the total value locked in its decentralized finance industry has plunged from $95 billion in August last year to $37 billion today.
Ethereum NFTs have also plunged, while its assets in the real-world asset (RWA) industry has dropped by 5.6% in the last 30 days. These numbers explain why Ethereum fees have plunged this year.
Ethereum’s demand in the futures market has also waned in the past few months. For example, the futures open interest has dropped to $22 billion from last year’s high of $62 billion.
ETH Price Technicals Suggest It Has More Downside
Ethereum price chart | Source: TradingView
Technicals point to more Ethereum price retreat this year. It has formed an inverted cup-and-handle pattern whose lower side is at $1,750. This pattern is one of the most common bearish continuation signs in technical analysis.
Ethereum has retested the lower side of the cup, which will confirm a break-and-retest pattern. It has remained below the 50-day moving average and the Supertrend indicator.
Therefore, the token will likely continue falling, potentially to the key support of $1,500. A move below that level will point to more downside, potentially to $1,000 over time.
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