At a Glance
- Long-term holders have been selling approximately 45,000 ETH daily, increasing sell-side pressure
- Ether’s price drop was preceded by significant offloads from long-term holders, potentially leading to a deeper correction
- Spot Ethereum ETF outflows have surged, exacerbating price suppression and fueling fears of a correction
- On-chain data indicates waning demand for Ether, with a decline in network fees and total value locked
- Technical analysis suggests a bearish flag pattern, targeting $2,500 if key support levels are broken
Long-Term Holders Accelerate ETH Sell-Off
Ether (ETH) experienced a notable drop below the $3,000 mark, a move that analysts suggest was preceded by substantial selling activity from long-term holders. This trend of seasoned investors offloading their holdings could signal further price corrections for the second-largest cryptocurrency.
Long-term holders, defined as those holding ETH for over 155 days, have notably increased their selling as the price faltered below critical support levels. Data from Glassnode, analyzed using a 90-day moving average of ETH spent volume by age, reveals that approximately 45,000 ETH, valued at around $140 million, is being moved from wallets held by 3-to-10 year holders on a daily basis. According to Glassnode, this represents the highest spending level by these long-term investors since February 2021.
This increased selling pressure from long-term holders is compounded by a significant surge in outflows from spot Ethereum Exchange-Traded Funds (ETFs). On a recent Thursday, these investment products saw net outflows totaling $259 million, marking their worst performance since October 10, according to data from SoSoValue. This marks the fourth consecutive day of outflows, occurring despite the recent end of a 43-day U.S. government shutdown, which failed to revive investor sentiment.
The cumulative net outflow from Ethereum ETFs since early November has reached $1.42 billion, indicating strong institutional selling pressure. This trend is fueling concerns about a potential deeper price correction for Ether.
On-Chain Data Suggests Declining Demand for Ethereum
On-chain activity over the past week presents a challenging view for Ethereum. While Ethereum continues to dominate its competitors, holding approximately 56% of the market’s total value locked (TVL), this metric has seen a 21% decrease over the last 30 days, as reported by DefiLlama. The decline in network fees is particularly concerning, signaling waning demand for blockspace and reinforcing the bearish sentiment surrounding Ether’s price around the $3,000 level.
Ethereum’s fees have fallen to $27.54 million over the past 30 days, a 42% reduction. For comparison, Solana’s fees saw a smaller decline of 9.8%, while BNB Chain revenue dropped by 45%, further underscoring the bearish market conditions.
This trend of declining on-chain activity, coupled with rising market fear—which has returned to levels not seen since past downturns driven by geopolitical events—could continue to weigh on Ether’s price in the coming weeks.
Bear Flag Pattern Points to Potential $2,500 Target for ETH Price
Analysts are cautioning that the current downward trend in Ether’s price could accelerate if a significant bullish shift does not materialize. This sentiment could impact day traders and smaller investors.
Analyst Bitcoinsensus highlighted on X (formerly Twitter) that Ethereum has lost its 50-week Exponential Moving Average (EMA), a critical macro support level previously at approximately $3,350. Historical data shows that similar breakdowns have led to substantial price drops, such as the 60% decline from $3,400 to $1,380 observed between late January and early April.
“Trend remains bearish unless price reclaims this level fast.”
Furthermore, Ether’s price action on the daily timeframe has formed a confirmed bearish flag pattern after breaking below the $3,450 level. This resistance confluence also included the 200-day Simple Moving Average (SMA) and the lower boundary of the bear flag.
The next significant support for ETH lies at the psychological level of $3,000. Bulls must defend this level robustly to prevent further declines. A breach below $3,000 could trigger a fresh downward leg, with the pattern’s measured target indicating a potential drop to $2,280, representing a 23% decrease from the current price point.
As previously reported, the $3,000 zone remains a critical support area for the ETH/USD pair, and holding this level is paramount to avoiding a more pronounced downturn.
Expert Summary
The current market sentiment surrounding Ether indicates significant downward pressure. Increased selling from long-term holders, substantial ETF outflows, and weakening on-chain demand metrics all point towards potential further price declines. Technical patterns suggest that a break below key support levels could lead Ether towards the $2,500 range.
