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Ethereum price has confirmed a dreaded death cross pattern on the weekly chart. Will it crash as demand for its ETFs continues to falter?
Summary
- Ethereum price has confirmed a death cross on the weekly chart.
- Over $2.6 billion has left spot Ether ETFs in the past four months.
According to data from crypto.news, Ethereum ($ETH) price has plummeted since mid-January this year. Trading around $2,000, which is a key psychological support level, the leading altcoin by market cap remains 40% below its yearly high.
The sharp downtick in price came amid massive liquidation events that have plagued the sector and a confluence of bearish headwinds coming from macroeconomic and geopolitical fronts.
As of now, Ethereum price remains at risk of prolonging the downtrend as traders remain precarious now that a highly bearish pattern has been validated. On the weekly chart, the 20-day exponential moving average has crossed below the 50-day one, forming what traders call a death cross.
Ethereum price has confirmed a death cross on the weekly chart — Feb. 18 | Source: crypto.news
Death crosses are one of the strongest signals of potential downtrend in the market, especially when supported by other bearish indications.
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Recent $ETH price action has respected a descending parallel channel pattern, which had been forming since mid-August last year. Usually, as long as an asset’s price remains within the boundaries of the pattern, they tend to remain in a downtrend over the longer run.
Such a bearish outlook looks highly likely as the $ETH price has fallen below the 23.6% Fibonacci retracement level at around the $2,200 support, making $ETH prone to a drop towards its April 7 low of $1,380. This would mark a roughly 30% drop from current prices.
On the contrary, if bulls manage to drive $ETH price back above the $2,200 mark, the bearish forecast will be invalidated.
Demand for Ethereum has also faded. Data from SoSoValue shows that the nine spot Ethereum ETFs have shed $278 million in outflows so far this month.
While this figure still pales in comparison to the $1.42 billion bled during November, the cumulative monthly outflows since then totalled over $2.6 billion within the past four months.
Such consistent outflows tend to erode retail interest and remove a major safety net that has previously supported Ethereum price during periods of high volatility.
Read more: Here’s why XRP price risks 25% drop in the coming sessions
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
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