Digital asset faces selling pressure from institutional redemptions and macroeconomic headwinds
Ethereum's price breached the $4,000 threshold for the first time since early August, pressured by sustained spot Ethereum ETF outflows and broader macroeconomic uncertainties. Despite this decline, significant on-chain whale accumulation points to cautious optimism for a potential rebound.
Market Overview and Price Movement
At the time of writing, Ethereum was trading around $3,988, marking a roughly 4% decrease from the previous day. The digital asset has surrendered approximately 13% over the past seven days and is down 10% for the month. The current price level sits about 19% below Ethereum's all-time high of $4,946, reached on August 24.
The downward price movement triggered over $170 million in long position liquidations. Yet, trading volumes displayed resilience rather than retrenchment, with daily turnover climbing to $35.2 billion, a 13% increase from the preceding day. This elevated activity suggests that traders remain engaged even amid the sell-off, potentially positioning themselves for future price movements.
Spot ETH ETF Outflows Add Selling Pressure
ETF products tied to spot Ethereum have contributed significantly to the selling momentum. Data from SoSoValue revealed that U.S.-based spot Ethereum ETFs experienced a combined net outflow of $79.4 million on September 24, marking three consecutive days of redemption. Fidelity's FETH ETF led the charge with $33.3 million withdrawn, followed closely by BlackRock's ETHA with $26.5 million in outflows. Other major issuers, including Grayscale, Ark 21Shares, and Bitwise, also registered significant redemptions during this period.
These ETF outflows come amid a shifting macroeconomic backdrop. The Federal Reserve's recent decision to cut interest rates by 25 basis points to a range of 4.00% to 4.25% initially sparked a brief surge in Ethereum prices, peaking above $4,600 on September 19. However, that rally lost steam, as profit-taking and softer labor market data prompted traders to scale back their bets on further upside. This pattern mirrors market behavior seen last year, where rallies ahead of policy changes eventually reversed.
A TradingView chart of the iShares Ethereum Trust ETF (ticker: ETHA) on the NASDAQ, showing daily candlesticks with moving averages overlaid.
Whale Accumulation Signals Possible Near-Term Floor
Amid the selling pressure, on-chain analytics reveal increased accumulation by large investors, often referred to as "whales." According to data shared on September 25 by Lookonchain, ten wallets linked to exchanges and over-the-counter venues—including Kraken, Galaxy Digital, BitGo, and FalconX—bought a combined total of 210,452 Ethereum, valued at roughly $862.9 million, within a six-hour window.
This surge in whale buying is typically interpreted as a sign of long-term confidence. Historically, such activity can precede price recoveries if selling pressure moderates, suggesting institutional participants view the current dip as an attractive entry point.
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Technical Outlook: Bearish Momentum Challenges Bulls
From a technical perspective, Ethereum's price structure has shifted into more cautious territory. The recent price breakdown below the Bollinger Bands' midline at approximately $4,408 now places the lower boundary near $3,750 in focus as a potential support zone.
Momentum indicators further reinforce the bearish sentiment. The Relative Strength Index (RSI) currently stands at 34.5, edging towards oversold levels, while the Moving Average Convergence Divergence (MACD) remains negative, confirming downward momentum. Additionally, the 10-day, 20-day, and 50-day moving averages have crossed above the current price, acting as resistance levels.
On the downside, the 200-day Exponential Moving Average (EMA) near $3,392 offers a longer-term cushion should the market experience deeper declines, whereas more immediate support is forming close to the 100-day EMA at $3,850.
For Ethereum to regain bullish momentum, traders will be looking for a sustained recovery above the crucial $4,250 to $4,400 range. However, if the current trend persists—driven by continued ETF redemptions and negative macroeconomic forces—Ethereum could face further downside pressure, potentially testing the $3,850 support or lower.
Market Implications and Outlook
Ethereum's recent price slide below $4,000 reflects a combination of continued outflows from spot ETH ETFs and cautious market sentiment amid macroeconomic uncertainty. Although whale accumulation signals long-term institutional interest, the technical analysis points to a cautious near-term outlook.
Market participants will be closely monitoring how Ethereum navigates key support and resistance levels as they assess the potential for a recovery or further downward pressure in the coming weeks. The interplay between institutional ETF flows and on-chain whale activity will likely determine whether the current weakness represents a temporary correction or the beginning of a more sustained downturn.
The $3,850 support level remains critical for maintaining medium-term bullish structure, while a decisive break above $4,250 would be needed to signal a meaningful recovery attempt.
DISCLAIMER
This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments involve substantial risk and extreme volatility - never invest money you cannot afford to lose completely. The author may hold positions in the cryptocurrencies mentioned, which could bias the presented information. Always conduct your own research and consider consulting a qualified financial advisor before making any investment decisions.
About Arnas B
Blockchain Researcher & Developer | 8+ Years Crypto Market Experience
Seasoned cryptocurrency researcher and blockchain developer with deep expertise in protocol analysis, smart contract development, and market insights since 2017. Specializes in emerging blockchain technologies, DeFi ecosystems, and cryptocurrency market trends. Combines technical development skills with comprehensive market research to deliver actionable insights for the digital asset space.
