The Ethereum price has confirmed a feared death cross pattern on the weekly chart. Will it crash if demand for its ETFs continues to falter?
Summary
- The Ethereum price has confirmed a deathcross on the weekly chart.
- Over the past four months, more than $2.6 billion worth of Ether ETFs have disappeared.
According to data from crypto.news, the price of Ethereum (ETH) has plummeted since mid-January this year. Trading around $2,000, which is a key psychological support level, the leading altcoin remains 40% below its annual high by market cap.
The sharp price drop came amid massive liquidation events that have plagued the sector and a confluence of bearish headwinds coming from macroeconomic and geopolitical fronts.
As of now, Ethereum price remains at risk of extending the downtrend as traders remain uncertain now that a very bearish pattern has been validated. On the weekly chart, the 20-day exponential moving average has fallen below the 50-day average, which traders call a death cross.
Death crosses are one of the strongest signals of a potential downtrend in the market, especially when they are supported by other bearish indications.
The recent ETH price action has respected a descending parallel channel pattern that had been forming since mid-August last year. As long as the price of an asset remains within the boundaries of the pattern, it generally tends to remain in a downtrend over the longer term.
Such a bearish prospect seems very likely as ETH price has fallen below the 23.6% Fibonacci retracement level around the $2,200 support, leaving ETH susceptible to a decline towards the April 7 low of $1,380. This would represent a drop of approximately 30% from current prices.
On the contrary, if bulls manage to push ETH price back above $2,200, the bearish prediction will be invalidated.
Demand for Ethereum has also faded. Facts from SoSoValue shows that the nine spot Ethereum ETFs have lost $278 million in outflows so far this month.
While this figure still pales in comparison to the $1.42 billion bled in November, cumulative monthly outflows since then have exceeded $2.6 billion over the past four months.
Such consistent outflows tend to erode retail interest and remove a large safety net that previously supported Ethereum price during periods of high volatility.
Disclosure: This article does not represent investment advice. The content and materials on this page are for educational purposes only.
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