Ethereum price lost key psychological support at $3,000 as the US Ethereum ETF recorded its third consecutive day of net outflows and broader market sentiment adopted a risk-averse mood.
summary
- Ethereum price fell below $3,000 on Tuesday for the third time this month.
- The U.S. Ether ETF lost nearly $140 million after losing money for the third day in a row.
- ETH price has reached the point where it confirms the bearish flag on the daily chart.
Nine Spot Ethereum ETFs recorded net outflows of $224.7 million on Monday, December 15th, the largest single-day outflow since November 21st, according to data from SoSoValue. BlackRock's IBIT led the outflows with $139 million out of its funds, followed by investment manager Grayscale's ETHE and ETH funds with $35 million and $20 million in outflows, respectively. There were no inflows into any ETH ETFs on this day.
Monday's outflows were the third consecutive day of net outflows from these investment products, with nearly $286.5 million outflows during that period. Notably, nine ETFs have been negative overall so far in December, continuing a trend seen the previous month when they lost $1.42 billion.
Amidst this, the Ethereum (ETH) price fell below $3,000 and dropped to $2,895, before settling at just above $2,929 at the time of writing, a decline of more than 6.3% in the past 24 hours. The psychological level of $3,000 has acted as a strong support area many times in the past few weeks, and analysts earlier pointed out that this level needs to be maintained to avoid further declines in the future.
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The top altcoin by market share plunged as large, highly leveraged derivatives traders and whales were likely caught off guard by Ethereum's sudden drop below $3,000, triggering a so-called liquidation cascade.
As background, a liquidation occurs when a long position is forced to close due to insufficient margin. Therefore, a sudden drop in price can lead to a liquidation cascade, making the price even cheaper.
CoinGlass data shows that approximately $207 million worth of long positions were liquidated from the Ethereum futures market, contributing a total of $658.8 million from the broader crypto market.
This comes as investors are likely exiting the market ahead of the U.S. jobs report due out today, which could influence the Fed's decision to cut interest rates over the next year. Investors are already becoming cautious after the Federal Reserve cut interest rates by 0.25%, signaling only one cut in 2026, the third rate cut this year.
Cryptocurrencies, including Ethereum, react positively to expectations of further Fed rate cuts and tend to fall when the outlook for a rate cut becomes uncertain.
On the daily chart, Ethereum price is forming a huge bearish flag pattern. It forms when a sharp price decline on high volume forms a “pole”, followed by a short period of consolidation or a small rise on low volume to form a “flag”. This pattern usually serves as a harbinger of further declines in the following months, as the price often breaks below the lower bound of the flag and reverts to the previous downtrend.
Ethereum price forms a bearish continuation pattern on daily chart — December 16 | Source: crypto.news
Major altcoins also confirmed a death cross that occurs when the 50-day simple moving average falls below the 200-day simple moving average in late November. Combining these two bearish indicators greatly increases the likelihood that Ethereum will continue to fall, at least until a market reversal occurs.
At this point, ETH could next fall below the flag towards November lows at $2,620, a level that bulls have managed to defend and begin a short-term recovery.
Meanwhile, traders should keep an eye on the resistance at $3,170, which coincides with the 23.6% Fibonacci retracement level. A breakout above this could end the current downtrend and return momentum in favor of the bulls.
read more: Bitwise Solana ETF records first outflow since launch in late October
Disclosure: This article does not represent investment advice. The content and materials published on this page are for educational purposes only.
