Ethereum Price Drops to Crucial Support as ETF Selling Spree Continues

Ethereum (CRYPTO: ETH) price has lost momentum and crashed to a crucial support level as American investors continued to book profits after the recent rally. ETH token retreated to the important support level of $2,461, its highest point in May this year. Ethereum Price Falls as ETF Outflows Jump American investors are selling their Ethereum ETFs, possibly as they book profits after the recent rally that pushed it from a low of $1,516 in June to a high of $2,806. SoSoValue data shows that these funds had over $56 million in outflows on Friday, the ninth consecutive day of outflows. In total, these funds have had over $634 million in outflows this month, a big reversal from what happened in the last three months. Spot Ethereum ETFs had over $365 million in inflows in July, followed by $1.85 billion in August. After that, they added $832 million in inflows last month, with BlackRock’s ETHA and ETHB being some of the top gainers. Read Also: Disney Stock Falls Into a Correction, but Goldman Sachs Calls It Highly Compelling The ongoing ETF outflows has coincided with the falling staking inflows. There are now 43.85 million staked tokens, a largely unchanged figure since October 1. Ethereum has a staking ratio of 35.9% and a reward rate of 2.55%. Other cryptocurrencies have had outflows this month. Bitcoin (CRYPTO: BTC) funds have lost over $388 million in assets this month after adding $2.65 billion in September and $3.52 billion in October. Similarly, spot Solana (CRYPTO: SOL) funds have lost over $29.4 million this month. The most likely reason for the ongoing Ethereum weakness is the rising US bond yields, which have surged to the highest level in decades recently. In most cases, risky assets recoil whenever there are challenges in the bond market. Also, investors are remembering the $19 billion liquidation event that happened on October 10 last year. ETH Price Remains Above Recent Averages Ethereum chart | Source: TradingView The ongoing ETH retreat does not mean that the recent rally has stalled. For one, it has remained above the 100-day Exponential Moving Average (EMA), a sign that the uptrend remains intact. The coin has also retested the important support level of $2,461, its highest level in May this year. That is a sign that it has formed a break-and-retest pattern, a common continuation sign in technical analysis. Therefore, there is still a possibility that the token will rebound once this shakeout phase ends. If this happens, it may retest the key resistance level of $2,806, its highest point this month. A surge above that level will point to more gains towards $3,000. Read Also: Warren Buffett's Net Worth Has Dropped $8.3 Billion This Year as Berkshire Hathaway Stock Lags Image: Shutterstock