Key Takeaways
- •Long-term investors have been selling approximately 45,000 ETH daily, increasing sell-side pressure on the market.
- •Technical analysis suggests Ether's 50-week Exponential Moving Average (EMA) and a bear flag breakdown could target a price of $2,500.
Long-Term Holders Are Offloading
Ether's recent decline towards $3,000 on Friday was preceded by significant sell-offs from long-term holders. Analysts suggest this activity may lead to a deeper price correction for the cryptocurrency.
Long-term holders, defined as entities holding ETH for more than 155 days, have intensified their selling as Ether's price fell below key support levels. Data from Glassnode, analyzing ETH spent volume by age over a 90-day moving average, indicates that approximately 45,000 ETH, valued at around $140 million, is being moved out of wallets held by 3-to-10-year investors daily. This marks the highest spending level by these seasoned investors since February 2021.
This marks the highest spending level by seasoned investors since February 2021.
This trend aligns with a surge in outflows from spot Ethereum exchange-traded funds (ETFs). These investment products recorded $259 million in net outflows on Thursday, their worst day since October 10, according to data from SoSoValue. This marked the fourth consecutive day of outflows for Ethereum ETFs, even as the end of the 43-day U.S. government shutdown failed to rekindle investor appetite.
The cumulative net outflow of $1.42 billion from Ethereum ETFs since early November signals strong institutional selling pressure, fueling concerns of a deeper market correction.
Ethereum On-Chain Data Signals Waning Demand
On-chain activity over the past seven days presents a concerning outlook. While Ethereum continues to lead 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, according to DefiLlama. This indicates a potential slowdown in decentralized finance activity on the network.
More concerning is the decline in network fees, which reflects waning demand for blockspace. This trend reinforces Ether's price weakness around the $3,000 mark.
Ethereum's fees over the past 30 days dropped to $27.54 million on Friday, representing a 42% decrease. In comparison, Solana's fees declined by a smaller 9.8%, and BNB Chain revenue dropped by 45%, further reinforcing the bearish sentiment in the market. This situation may continue to pressure Ether's price in the coming weeks, especially when combined with rising market fear, which has returned to levels last seen during the sell-off triggered by President Donald Trump's tariff announcements in April.
ETH Price Bear Flag Targets $2,500
Many analysts are warning that the current downtrend could accelerate unless a clear bullish shift occurs. This situation may add further pressure on day traders and smaller holders.
"Ethereum loses the 50-week EMA, a key macro support," said analyst Bitcoinsensus in a recent X post, referring to the $3,350 level. Past breakdowns below this critical moving average have historically triggered significant downside moves. The last instance resulted in a 60% drop, from $3,400 to $1,380, between late January and early April.
Trend remains bearish unless price reclaims this level fast.
Ether's price action on the daily timeframe has validated a bear flag pattern after breaking below $3,450. This level coincided with the 200-day Simple Moving Average (SMA) and the lower boundary of the identified bear flag.
The next significant support level is at the $3,000 psychological mark, which bulls must defend aggressively to prevent further losses. A failure to hold this level would clear the path for a fresh downward leg, potentially targeting the pattern's measured objective at $2,280, representing a 23% drop from the current price.
As previously reported, $3,000 remains a crucial support zone for the ETH/USD pair, and holding this level is vital to avoiding further price depreciation.