Ethereum Flashes Death Cross as ETF Outflows Surge, Futures Open Interest Dives
Crispus Nyaga 7 hours ago
MarketsCryptocurrency
Ethereum price has plunged and formed a death cross pattern, suggesting more downside possible as futures open interest drops.
Ethereum (CRYPTO: ETH) extended its steep decline, falling to its lowest level since August 19 and sitting 33% below its September high. It has now formed a death cross, a bearish pattern, as ETF outflows jump and futures open interest drops.
Ethereum ETF Outflows Have Jumped as Open Interest Drops
ETH has come under intense pressure in recent months as investors have embraced a risk-off sentiment. The sell-off accelerated after the midterm elections, in which Democrats won both the Senate and the House of Representatives, raising the prospect of stricter regulation.
Ethereum demand has stalled. SoSoValue data shows that spot Ethereum ETFs have suffered $764 million in outflows this month, after losing $1.61 billion in October. Most of the outflows came from funds managed by BlackRock, Grayscale, and Fidelity. Rising outflows is a sign that institutional investors expect the coin to continue falling.
The same trend is happening in the futures market, where open interest has continued falling. It dropped to $23.3 billion on Saturday, down sharply from the September high of $36 billion. Falling open interest suggests demand in the highly leveraged futures market is waning.
The trend has led to a surge in liquidations. Ethereum positions worth more than $171 million were liquidated in the past 24 hours. Liquidations occur when exchanges are forced to close leveraged positions to prevent further losses, and they often add to downward pressure.
Ethereum’s fundamentals have also worsened in the past few months. One of these is the fees the network makes. DeFi Llama data shows that the network has collected over $153 million in fees this year, down from $523 million last year. The network made over $2.4 billion in fees in 2024.
Ethereum Price Has Formed a Death Cross Pattern
The daily chart shows that ETH token has been in a steep downward trend in the past few months. It has now slumped below the crucial support level of $2,000, which is both a psychological level and the 61.8% Fibonacci Retracement point.
The coin has also flashed a death cross pattern, which happens when the 50-day and 200-day Exponential Moving Averages (EMA) cross each other. This pattern usually leads to more downside over time.
Therefore, there is a risk that the token will drop further, potentially to the psychological level of $1,500.
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