Ethereum Drops 4% as Long-Term Holders Sell, ETF Outflows Add Pressure

Ethereum (ETH) has experienced a significant sell-off, with its price dropping over 4% in the past day, currently trading at $2442.32. The cryptocurrency has fluctuated between $2389.71 and $2556.98 in the last 24 hours, indicating heightened volatility. The sell-off has been driven by a surge in activity from long-term holders, as indicated by the Liveliness metric hitting a record high of 0.69. This metric suggests that dormant accounts are becoming active, likely preparing to sell their holdings, which adds to the growing bearish pressure on Ethereum.

The Ethereum chain has seen a notable decrease in its total supply, dropping from 27.99 million ETH on May 6 to around 25 million ETH. This reduction, coupled with weak buying interest and falling capital inflows, has contributed to the downward pressure on ETH's price. If the selling continues, Ethereum could potentially fall to $2,185 or even retest its May low. However, a rebound in demand could shift the momentum back to the upside.

On June 20, Ethereum ETFs experienced a net outflow of $11.3 million, with the biggest withdrawal coming from ETHA at $19.7 million. This outflow adds to the short-term price risks for Ethereum, as it indicates a reduction in institutional investment. Despite this, other ETFs reported no activity, suggesting that the outflow may not be indicative of a broader trend.

Ethereum has also seen significant liquidations, with $170 million in the last 24 hours, $157 million of which were long positions. This liquidation wave, combined with the sell-off, has contributed to the downward pressure on ETH's price. Data from Santiment shows that ETH is flowing into centralized exchanges at an unusually high rate, significantly more than outflows. Unless buying picks up, ETH could face more short-term downside.

Ethereum's moving averages also paint a mostly bearish picture. Short-term indicators like the 10-day to 30-day EMAs and SMAs are all signaling sell, with prices below key resistance levels around $2,500. If Ethereum breaks above the $2,800–$2,850 resistance zone in the next 30 days, it could climb toward $3,000. This move may be backed by strong fundamentals and new inflows from ETH ETFs. However, the current trend is weak, so a real breakout will need stronger buying momentum to hold. Ethereum could retest the $2,800–$2,900 range in June if bullish momentum picks up. But if macro conditions worsen, it risks dropping to $2,280.