Ethereum is down 24% this week, recording the breakdown of the $2,200 crucial support level. The downfall now accounts for a plunge of nearly 50% from its recent swing high of $4,100 from the late 2024 high.
Currently, ETH trades at a market value of $2,132, warning of a steeper correction in the weekly chart.
Futures Market: Bears in Control?
In the futures market, the long-to-short ratio stands at 0.9384, revealing a slightly larger number of bearish positions at play. Furthermore, the bulls are forced to pay a premium to hold their long positions.
This is based on the funding rate, which stands at 0.0048%. The open interest is down by 10.16% to $19.15 billion. Furthermore, the long liquidation has risen up to $186 million, with a total liquidation of $218 million in the past 24 hours.
Institutions Outflows Dump Ethereum?
Amid the falling ETH prices, the institutional support for Ethereum is on a declining trend. On February 27, the daily total net inflow of ETH ETFs in the US markets recorded an outflow of $71.08 million.
While the majority of the ETFs maintained a net-zero flow, BlackRock offloaded $26 million in the market. Fidelity followed with a $25.45 million worth of outflow, with Grayscale dumping nearly $20 million.
This marks the sixth consecutive bearish outflow for Ethereum since February 20.
ETH Price Analysis Reveals Breakdown Chances
With the $2,200 breakdown, ETH price is now trading at levels last seen in September 2024. However, in September 2024 and August 2024, Ethereum managed to bounce back with a lower price rejection from this crucial level.
Currently, ETH is trading underneath this level and hints at a potential closure below this. This will mark a critical support level breakdown and could result in Ethereum’s capitulation.
The MACD signal lines in the weekly chart have given a bearish crossover. Furthermore, the RSI line is under the halfway level and is approaching the oversold boundary line. Hence, the technical indicators are maintaining a sell signal for Ethereum.
Key Support Levels For Ethereum
Based on the price action analysis, the crucial support for Ethereum underneath $2,200 is the $2,000 psychological mar. Followed by the critical support level at $1,542.
The last time the ETH price reached $1,542 was in October 2023. Hence a closing under $2,200 by the end of this week will hint at a potential crash in ETH prices.