Key Takeaways
- Long-term ETH holders are selling approximately 45,000 ETH daily, increasing sell-side pressure.
- ETH’s 50-week Exponential Moving Average (EMA) has been breached, and a bear flag pattern suggests a potential target of $2,500.
- Outflows from spot Ether exchange-traded funds (ETFs) have surged, indicating significant institutional selling.
- On-chain data shows decreasing network fees and a decline in total value locked (TVL), signaling waning demand for Ethereum blockspace.
Long-Term Holders Increase Selling Activity
Ether (ETH) recently experienced a notable price drop toward the $3,000 mark, a movement that has been linked to increased selling activity from long-term holders. Analysts suggest this trend could precede a more significant price correction.
Entities that have held ETH for over 155 days have been intensifying their sell-offs, particularly as the price fell below critical support levels.
📊 Glassnode analysts, examining ETH spent volume categorized by age using a 90-day moving average, observed that wallets holding ETH between three and ten years are offloading approximately 45,000 ETH daily. This amounts to roughly $140 million worth of ETH being sold each day.
This marks the highest spending level by seasoned investors since February 2021, Glassnode commented on the trend.
This surge in long-term holder selling aligns with a significant increase in outflows from spot Ethereum exchange-traded funds (ETFs). These investment products saw net outflows totaling $259 million on Thursday, marking their worst performance since October 10, according to data from SoSoValue.
⚡ This marks the fourth consecutive day of outflows for Ethereum ETFs, and investor appetite has not been rekindled even by the resolution of the 43-day US government shutdown.
The cumulative net outflow of $1.42 billion from Ethereum ETFs since early November points to substantial institutional selling pressure, fueling concerns about a deeper price correction.
On-Chain Data Indicates Weakening Demand for Ethereum
The on-chain activity observed over the past seven days presents a concerning outlook for Ethereum. While Ethereum continues to lead its competitors, capturing approximately 56% of the market’s total value locked (TVL), this metric has seen a 21% decrease in the last 30 days, according to DefiLlama.
📍 Even more alarming is the decline in network fees. This reduction signifies waning demand for blockspace, which corroborates the weakness in Ether’s price around the $3,000 level.
Ethereum’s fees over the last 30 days dropped to $27.54 million by Friday, a decrease of 42%. In comparison, Solana’s fees declined by only 9.8%, and BNB Chain revenue saw a 45% drop. This broader trend reinforces the bearish sentiment in the market.
This pressure on Ethereum’s price could persist in the coming weeks, especially when combined with rising market fear. Fear levels have returned to those seen during the sell-off triggered by announcements of tariffs by US President Donald Trump in April.
Bear Flag Pattern Suggests Potential ETH Price Target of $2,500
Many market observers are cautioning that the current downtrend could accelerate if a clear bullish reversal does not materialize. This scenario could place additional pressure on day traders and smaller investors.
💡 Analyst Bitcoinsensus highlighted this concern on X (formerly Twitter), stating: Ethereum loses the 50-week EMA, a key macro support, referring to the $3,350 level.
Historically, breakdowns below such key levels have led to significant downward price movements. The last breach of the 50-week EMA resulted in a 60% drop, from $3,400 to $1,380, between late January and early April.
Bitcoinsensus further commented: Trend remains bearish unless price reclaims this level fast.
On the daily timeframe, Ether’s price action has confirmed a bear flag pattern following its break below $3,450. This level also coincided with the 200-day Simple Moving Average (SMA) and the lower boundary of the bear flag structure.
The next significant support level for ETH currently lies at the psychological $3,000 mark. Bulls must defend this level assertively to prevent further declines.
A failure to hold the $3,000 support could open the path for a fresh downward move, with the pattern’s measured target suggesting a potential drop to $2,280, representing a 23% decrease from the current levels.
As previously noted, the $3,000 zone is a critical support area for the ETH/USD pair, and maintaining this level is vital to avoid extended losses.
Expert Summary
Current data indicates significant selling pressure on Ethereum from both long-term holders and institutional investors via ETFs. Technical analysis suggests a bearish outlook, with a bear flag pattern pointing towards a potential price target of $2,500 if key support levels are not maintained.
