Ethereum Price Prediction as ETH ETF Outflows Rise, Open Interest Drops
Key Insights
- Ethereum price has been flat since February this year.
- Spot ETH ETFs have had outflows in the last five consecutive months.
- ETH futures open interest has dwindled since the first week of February.
Ethereum price was stuck in a narrow range today, March 28, as the crypto industry remained under pressure. ETH token was trading at $2,030, down modestly from this month’s high of $2,385.
Spot ETH ETF outflows accelerate and open interest declines, signaling weakening market confidence. A bearish flag pattern forms, putting the coin at risk of a steep dive.
Ethereum Price at Risk as ETF Outflows Rise
ETH price moved sideways and may be at risk of more downside as data points to weaker demand.
Data shows that spot ETH ETFs shed assets in the last eight consecutive days, the longest streak this year. They lost $46 million in assets on Friday, bringing the weekly outflows to over $206 million.
These funds have now lost over $83 million in assets this month. It is the fifth consecutive month that these funds have lost assets. They now have a consecutive inflow of $11.5 billion in inflows, with the total net assets standing at $11.2 billion.
Therefore, there is a likelihood that American institutional investors are dumping their ETH holdings amid escalating market volatility. This volatility is happening as the Iran war continues, raising energy prices.
Crude oil prices jumped this week, with Brent closing at $112, and the US main benchmark rising to $110.
Other energy prices have continued to rise over the past few weeks, a trend that may escalate next week. For one, Houthi rebels have joined the war. This means that they may interfere with oil traffic in the Red Sea.
There are chances that US inflation will continue to rise in the coming months. That will make it almost impossible for the Federal Reserve to cut interest rates. It’s a move that would have boosted crypto prices.
ETH Futures Open Interest is Dwindling
The other key bearish driver for Ethereum is the sharp decline in futures open interest over recent weeks. This drop signals fading trader conviction and adds weight to the downside risk. Data compiled by CoinGlass shows that the open interest stood at $30 billion on Saturday.
It has remained inside this range in the past two months. It’s a sign that Ethereum demand continues to wane amid the ongoing Iran war.
ETH open interest has stalled | Source: CoinGlass
The same is happening among Ethereum treasury companies. Per CoinGecko, only BitMine, SharpLink, and Eightco Holdings have bought Ethereum in the last 30 days. BitMine bought 238,244 coins, while the other two bought 3,860 and 11,000 coins, respectively.
ETH active addresses have dropped | Source: Nansen
This fading demand is happening as third-party data shows that the network growth has stalled. According to Nansen, Ethereum has lost the momentum it had a few months ago. It handled 64.6 transactions in the last 30 days, down by 4% MoM.
The number of active addresses dropped by 16% to 11.6 million. At the same time, the fees collected dropped by 40% to $10 million in the same period.
Ethereum Price Prediction: Bearish Flag Points to a Crash
The daily timeframe chart reveals that the ETH token has moved sideways in the last two months. It has remained inside the key support and resistance levels at $1,775 and $2,370. This channel is part of the formation of the bearish flag pattern, which normally leads to a strong breakdown.
ETH price remains below the dynamic resistance levels of the 50-day and 100-day moving averages. At the same time, the RSI indicator has slipped below 50 and is pointing downwards. The Average Directional Index (ADX) has slumped to 16, its lowest level in months.
ETH price chart | Source: TradingView
Therefore, the token will likely have a strong bearish breakout in the coming days. This view will be confirmed if it drops below the support level at $1,774.
If this happens, it will plunge to the psychological level at $1,500. On the other hand, a rebound above the upper side of the channel at $2,370 will invalidate the bearish outlook.
The post Ethereum Price Prediction as ETH ETF Outflows Rise, Open Interest Drops appeared first on The Market Periodical.
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