Ethereum News Today: Ethereum Slides to $2,960 as U.S. Selling Pressure and ETF Outflows Weigh on Demand

Ethereum prices have dropped to $2,960 as market activity weakens. Weekly active addresses on the Ethereum network have plunged from 440,000 to 324,000 in December. This sharp decline marks levels not seen since May and suggests reduced demand for the cryptocurrency.

The drop in active addresses is mirrored in network transactions, which have also declined to July levels. Analysts attribute this to investors moving to the sidelines amid rising selling pressure. This trend is visible in U.S. spot Ethereum ETFs, which have seen $224.78 million in outflows over three consecutive days.

Technical indicators for Ethereum remain bearish. The Relative Strength Index (RSI) continues to trend downward, while the Stochastic Oscillator has entered the oversold region. This could prompt a short-term rebound, though long-term bearish momentum remains strong.

Why the Sell-Off Intensified

The resumption of U.S. selling pressure is evident through the Coinbase Premium Index, which recently fell into negative territory. This index drops below zero when ETH's price on Coinbase is lower than on Binance. The negative premium signals a shift in trading dynamics, favoring offshore platforms and intensifying selling pressure.

The decline in on-chain activity is also reflected in Ethereum's liquidation data. Over $104.9 million in liquidations occurred in the past 24 hours, with long positions accounting for $73.6 million. This selling pressure has pushed Ethereum near the critical $2,850 support level, below which further declines are likely.

Market Reactions and Institutional Moves

The Ethereum price drop aligns with broader macroeconomic trends. The U.S. job market saw the unemployment rate hit 4.6%, its highest since 2021. This data likely contributed to risk-averse behavior among investors, accelerating outflows from crypto positions.

In a move to reinforce Ethereum's institutional appeal, JPMorgan recently launched a tokenized money market fund seeded with $100 million. While this adds long-term credibility, the fund's impact on Ethereum's immediate price trajectory remains uncertain. The price continues to test key support levels, with a daily close below $2,910 potentially exposing it to further declines.

Risks to the Ethereum Outlook

Ethereum faces multiple downside risks if the current trend continues. A breakdown below $2,850 could lead to a retest of the $2,400–$2,600 support range. On-chain metrics indicate that such a drop could persist until network activity picks up and demand returns.

Investor caution is also heightened by the performance of Ethereum ETFs. Grayscale's ETHE and ETH funds have seen continued outflows despite the 2024 ETF launch. ETHE, with a 2.5% expense ratio, lags behind other ETFs like iShares and Grayscale's ETH, which charge lower fees and offer better staking returns.

What This Means for Investors

Investors are closely watching Ethereum's ability to rebound from key support levels. A successful retest of $3,100 could signal renewed buying interest, but a failure to hold above this level would likely extend the downtrend. Traders are also monitoring the RSI and Stochastic Oscillator for signs of a potential reversal.

For long-term investors, Ethereum's on-chain metrics remain a crucial indicator of future demand. A sustained recovery in active addresses and transaction volume would signal renewed market confidence. Until then, the market remains in a cautious phase, with prices vulnerable to further declines in the absence of strong demand.