Important points:
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Ethereum ETFs experienced outflows for the third day in a row, totaling $364 million.
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Strategic Ether reserves and ETF holdings have decreased by 124,060 ETH since mid-October.
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The Ether descending triangle is operating on the 8-hour chart and targets the ETH price at $2,870.
Ether (ETH) has fallen 14% over the past 30 days, dropping below $4,000 to trade at $3,724 on Monday. However, technical and ETF data are less bullish, raising the possibility of further correction below $3,000.
ETH price falls due to decline in institutional investor demand
Ether’s price decline can be attributed to investor risk aversion, which can be seen across spot Ethereum exchange traded funds (ETFs). Traders have been withdrawing money from these investment products over the past two weeks.
Related: ETFs will lead financial institutions to altcoins like Bitcoin: Analyst
The US-based Spot Ether ETF recorded continuous outflows over the past three days, totaling $363.8 million, according to SoSoValue data.
As reported by Cointelegraph, four consecutive days of inflows into the new US-based Spot Solana ETF suggest continued rotation of funds out of Bitcoin and Ether funds.
According to data from StrategicETHreserve.xyz, total holdings in strategic reserves and ETFs have decreased by 124,060 ETH since October 16th.
This decline highlights declining demand among major institutional investors and corporate players.
“Ethereum treasury companies remain in the doldrums and the only meaningful buyer is Bitmain,” analyst Ted Pillows wrote in a post on Monday
Due to the price drop, “treasury companies will soon run out of funds to purchase ETH,” the analyst wrote, adding:
“Until these stocks recover, I don’t see any chance of ETH price recovering.”
Descending triangle predicts 22% decline
Since October 7th, ETH price has formed a descending triangle pattern on the 8-hour chart, featuring a flat support level mixed with downward resistance.
A descending triangle chart pattern that forms after a strong uptrend is seen as a bearish reversal indicator. As a rule, the setup resolves when the price falls below the flat support level and to the maximum height of the triangle.
“ETH has broken below the descending triangle pattern and is currently testing its breakdown level,” analyst CryptoBull_360 said in Monday’s X-Post, adding:
“A successful retest of the breakdown level confirms the continuation of the downtrend.”
Triangle’s price target is $2,870, or 22% downside from current price levels.
Adding to the downside for Ether is the supertrend indicator, which flashed a bearish signal on Thursday when it flipped from green to red and moved above the price.
This indicator overlays the chart while tracking the trend of ETH price like a moving average. The calculation incorporates the average true range and helps traders identify market trends.
The most recent sell signal from this indicator occurred on October 7th, after which the price fell 22% from $4,750 to $3,700.
Pillows said ETH price is in a “key support zone” around $3,700, adding that if $4,000 is not recovered soon, it could fall further to $3,500.
As reported by Cointelegraph, a breakout of the $3,700 support level could cause the ETH/USD pair to fall to $3,350.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk and readers should conduct their own research when making decisions.