Key Points
Ethereum experienced a turbulent weekend.
Its exchange-traded funds saw large outflows, exchange balances increased, and staking yield decreased.
Ethereum’s Current Market Situation
Currently, Ethereum (ETH) is trading at $3,268.
This is a decrease from the previous month’s high of $4,104.
This trend is similar to that of Bitcoin (BTC), which has also seen a decrease from its all-time high of $108,000 to below $95,000.
Ethereum has seen a pullback as demand for its ETFs on Wall Street has decreased over the past few days.
According to SoSoValue, all Ethereum funds lost $68 million in assets on Friday after losing $159.3 million on Thursday and $86 million on Wednesday.
These funds now hold over $11.61 billion in assets.
This represents 2.96% of Ethereum’s market cap.
In comparison, Bitcoin ETFs hold $107 billion in assets, which is 5.2% of its market cap.
According to CoinGlass, Ethereum balances on centralized exchanges have increased this year.
There are now 15.8 million ETH coins on exchanges, up from 15.30 million on Dec. 30.
This increase in exchange balances indicates that investors are moving their tokens from their wallets to CEX platforms.
This transfer of cryptocurrencies to exchanges is usually the first step towards selling them.
Data also shows that Ethereum’s futures open interest has decreased from its December high of $31.1 billion.
This is a sign of falling demand.
Over the last five days, its daily open interest has remained at $28.4 billion.
On a positive note, Ethereum and other cryptocurrencies often see a rebound when the open interest falls.
For instance, ETH price started its recent rally in November when the interest dropped to $14 billion.
However, Ethereum stakers are earning a smaller yield.
According to StakingRewards, ETH has a staking reward rate of 3.10%.
This is much lower than Solana’s (SOL) 7% and Tron’s (TRX) 4.52%.
Ethereum’s staking rewards often decrease when more tokens are delegated to staking pools and when fees fall.
As shown below, Ethereum’s fees have been on a downward trajectory in the last few weeks.
The daily chart shows that the ETH price peaked at $4,104 in December, forming a double-top pattern with a neckline at $3,520.
It has dropped below the 50-day moving average at $3,415, and found substantial support at the 100-day moving average.
Ethereum also found support at the ascending trendline that connects the lowest levels since Nov. 15.
There are signs that the coin has formed a head-and-shoulders pattern, a popular bearish sign.
Therefore, a drop below the 100-day moving average and the ascending trendline will point to a bearish breakdown, potentially to $2,820, the highest level since August last year.
