Ethereum News Today: BlackRock Moves $140M ETH to Coinbase Prime Amid ETF Redemptions and Falling ETH Prices

Ethereum's price dropped below $3,000 for the third time this month as investors continued to withdraw from Ethereum ETFs. The iShares Ethereum Trust (ETHA), managed by BlackRock, experienced a significant outflow of $221.3 million on December 16, reflecting broader market caution. Amid this decline, BlackRock transferred 47,463 ETH, worth $140 million, to Coinbase Prime to handle ETF redemptions and stabilize the fund.

The drop in price has coincided with a noticeable shift in investor sentiment. On-chain analytics show that both long-term and short-term holders of Ethereum are seeing reduced profitability levels. The MVRV Long/Short Difference has dipped below the zero line, indicating that neither group holds significant unrealized profits. This signals growing uncertainty among ETH investors.

Ethereum's recent price performance has also been marked by reduced network activity. Active Ethereum addresses have fallen to a seven-month low, highlighting a decline in engagement with the network. This trend suggests limited incentive for transactions amid the price's stagnation and raises concerns about the asset's ability to sustain a meaningful recovery in the near term.

Institutional Rebalancing and ETF Mechanics

BlackRock's movement of $140 million worth of ETH to Coinbase Prime was not a sell-off but a necessary rebalancing measure during a period of heightened volatility. The firm is adjusting its holdings to accommodate redemptions and ensure the ETF tracks the spot price of Ethereum accurately. This action underscores BlackRock's commitment to maintaining fund stability and reflecting institutional confidence in Ethereum as a foundational blockchain asset.

The ETF outflows, totaling $224.2 million across all U.S. Ethereum ETFs on December 16, were largely attributed to ETHA. This liquidity shift reflects strategic de-risking by investors rather than a wholesale retreat from the asset. Analysts note that rebalancing prevents deviations from net asset value, a critical safeguard in volatile markets.

Technical Analysis and Market Outlook

Ethereum's price action has weakened further, with the cryptocurrency now trading below $3,000 and down 6.8% in the last 24 hours. A macro analysis by crypto analyst Dona suggests that Ethereum may bottom out near $2,187, based on its two-year range. This level has historically acted as a bounce floor during prior downtrends. If the price continues to fall below $3,000, the next target could be this lower boundary, completing another cycle within the range.

The broader market context for Ethereum remains mixed. While the tokenized money market sector shows innovation, the immediate future for Ethereum ETFs will depend on whether the $3,000 support level holds. If bulls manage to push the price back above this threshold, Ethereum could see renewed interest and a potential challenge to the $3,131 resistance level. Otherwise, further downside risk persists.

Risks to the Outlook

The Ethereum price decline has also had a notable impact on large investors. A prominent Ethereum whale saw unrealized losses exceed $54 million as prices fell below $3,000. This whale, known as "BitcoinOG," had aggressively moved capital into ETH long positions after the April price recovery. Despite the losses, the whale's positions remain liquid, with an estimated liquidation price near $2,082.

Derivatives markets have also experienced significant volatility. Open Interest in Ethereum futures dropped 55.29% to $37.67 billion, while Derivatives Volume surged 53.5% to $87.15 billion. This suggests a wave of offsetting trades as traders close their positions. Liquidations have accelerated, with long positions being hit particularly hard according to market data.

What This Means for Investors

For investors, the current Ethereum environment requires a careful balance between short-term caution and long-term conviction. The ETF outflows and price weakness highlight the cyclical nature of the market, where institutional players like BlackRock play a critical role in stabilizing volatility. Ethereum's role as a programmable blockchain infrastructure remains intact, with companies like BlackRock embedding crypto into their core financial tools.

While the immediate future for Ethereum appears bearish, the broader structural adoption of the asset continues to gain momentum. Institutional confidence and on-chain activity suggest that Ethereum's ecosystem remains resilient. Investors should closely monitor ETF flows and on-chain analytics for early signals of market recovery.