Ethereum Headwinds: Outflows from Spot ETFs and Whales Dumping Will Force ETH to $2,000?

Ethereum, like Bitcoin, is dropping like a rock and under immense selling pressure. After yesterday’s sell-off, which saw the coin nearly retest the psychological round number at $2,000, prices temporarily recovered. Still, the downtrend remains, and Ethereum remains within a bear breakout formation, looking at events in the daily chart. The local resistance will be $2,500 and $2,800 in the short term. If not, and sellers take over, Ethereum might drop below $2,000.

Ethereum might be steady at press time, but the failure of bulls to flow back and push the coin above $2,500 is a concern. From the look of things, sellers are in the driving seat. So far, Ethereum is down 30% from July 2024 highs. However, the meltdown had slowed down at press time, losing 25% in the past week. The average trading volume over the past 24 hours remains high, standing at over $40 billion.

Traders are monitoring the following Ethereum news events:

• Amid the sell-off, some whales are spooked. According to on-chain trackers, one whale sold over $48 million of ETH when prices dropped yesterday– worsening the sell-off and dampening sentiment.
• The nine spot Ethereum ETFs continue to post discouraging outflows. Over $54 million of ETH were redeemed yesterday with Grayscale’s ETHE leading.

Ethereum Price Analysis

From the daily chart, ETH/USD is within a bear breakout formation.

It should be noted that the sharp drop below $2,800 is due to rising volume, cementing the bearish outlook.

As it is, aggressive traders may look to short on every attempt high below $2,500 and August 5 highs.

The first target is the psychological round number at $2,000 and later $1,800.

However, if there is a reprieve and Ethereum bulls find strength, a break above $2,800 would ignite demand, improving general market sentiment after the washout of the last three days.