Ethereum slipped below 3,300 USD amid investors capitulating

Ethereum (ETH) has returned to a fall, currently trading below the 3,300 USD mark on Thursday afternoon. This negative movement reflects the weakening trend of Bitcoin (BTC), as the world's leading cryptocurrency has also dropped below the 102,000 USD threshold.

The overall market landscape shows that the recovery efforts of digital assets are becoming increasingly challenging, reflected in the decline in demand from both institutional and individual investors. Nevertheless, the amount of ETH held on exchanges continues to decrease, indicating that the selling pressure in the spot market is gradually easing — a signal that could pave the way for a new bullish cycle of Ethereum in the near future.

Analysis of the depletion of Ethereum reserves on exchanges

According to data from Glassnode, the amount of Ethereum (ETH) held on exchanges has fallen sharply over the past four years. After peaking at around 35.5 million ETH in August 2020, this number has continuously decreased and is now only about 13.3 million ETH as of last Wednesday.

This stable decline reflects the long-term accumulation trend of investors as they move assets to self-custody wallets or participate in staking to earn passive income. As a result, the available supply of ETH in the open market is increasingly shrinking, helping to reduce selling pressure and creating a foundation for price recovery due to scarcity factors.

Ethereum reserves on the exchange | Source: GlassnodeOn the contrary, institutional investors are temporarily reducing their exposure to spot Ethereum ETFs. Data from SoSoValue shows that ETFs listed in the US experienced outflows of approximately 119 million USD on Wednesday, bringing the total accumulated net outflow down to 13.9 billion USD, while the total net assets (AUM) currently stand at 22.74 billion USD.

Among the nine active Ethereum ETF funds, only three reported inflows, including Grayscale ETH (24 million USD), Fidelity FETH (3.45 million USD), and 21Shares TETH ( about 515,000 USD). In contrast, BlackRock ETHA leads the list of outflows, with 147 million USD withdrawn from the fund.

Ethereum ETF Statistics | Source: SoSoValueNot only institutional investors, but retail investors are also gradually losing interest. Open Interest (OI) – representing the nominal value of open futures contracts – has fallen to 38.6 billion USD, significantly lower than the peak of nearly 63 billion USD in October.

OI is an important indicator reflecting the level of interest and confidence of investors in the asset. The continuous weakening of this index indicates that many traders are closing their long positions ( and switching to short ), thereby increasing selling pressure in the market.

Open Contract of Ethereum | Source: CoinGlass## Technical Outlook: Ethereum continues to weaken as risk sentiment falls.

Ethereum is currently trading below the 3,300 USD level, facing strong pressure from the overall bearish sentiment in the cryptocurrency market. On the daily timeframe, the bears continue to dominate as the relative strength index (RSI) drops to 32 — approaching the oversold zone, indicating that the weakening momentum is increasing.

At the top of the chart, the MACD indicator (Moving Average Convergence Divergence) has maintained a sell signal since the beginning of the week, clearly warning that investors should be cautious, limit risks, and consider narrowing their positions.

ETH/USDT daily chart | Source: TradingViewTraders are currently focusing on monitoring the price reaction around the short-term support zone. If Ethereum closes the daily candle below this zone, the downtrend will be reinforced. Notable support levels below include 3,057 USD — a price level that was tested on Tuesday — and 2,880 USD, a key milestone recorded since June.

However, the possibility of a technical rebound still remains open. If the buying force is strong enough to catch the bottom, ETH could rebound, opening up the opportunity to rise above the 200-day exponential moving average at 3,599 USD — a crucial barrier that determines the next direction of the second-largest cryptocurrency in the market.

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