Ethereum is facing renewed selling pressure, with its price crashing for two straight weeks and returning to a key $4,000 support level. The drop has been fueled by record ETF outflows, slowing institutional demand, and a wave of liquidations across major exchanges.
Ethereum price tests key support
As of this week, ETH was trading right at the $4,000 support level down from its year-to-date high of $4,920 but still up more than 190% from April’s low of $1,377.
The two-week slide has erased much of the strong institutional momentum that built earlier in September. Data shows that U.S.-listed Ethereum ETFs shed $795 million this week, the largest weekly outflow on record. That surpasses the previous record of $787 million set earlier this month.
By comparison, ETH funds had added $556 million just last week and $637 million the week before. The sharp reversal underscores how quickly sentiment can swing among American institutions. Even so, ETH ETFs still hold about $26 billion in assets, representing 5.37% of the total Ethereum supply.
Liquidations deepen the selloff
Beyond ETF outflows, Ethereum also saw more than $1.5 billion in liquidations this week. Exchanges like Binance and OKX were forced to close leveraged long positions as prices tumbled, amplifying the downside move. Historically, liquidation cascades often accelerate market declines, and this week was no exception.
Macro headwinds add pressure
Macro factors haven’t been kind either. Concerns are growing over whether the Federal Reserve will maintain its rate-cutting path as inflation remains sticky. A fresh report showed personal consumption expenditures the Fed’s preferred inflation gauge moving further away from its 2% target. That uncertainty weighed on risk assets like Ethereum.
Technical outlook: Break-and-retest in play
On the charts, ETH has pulled back from $4,918 to as low as $3,825 this week. Yet there are still some positives for the bulls:
- ETH is currently forming a break-and-retest pattern, as the $4,000 zone lines up with prior highs from March, May, and November of last year. This is often seen as a continuation signal.
- The coin remains above both the 50-week and 100-week Exponential Moving Averages (EMAs) another sign of underlying strength.
As long as Ethereum holds above $4,000, the broader outlook remains bullish. In that scenario, analysts believe ETH could retest its all-time highs and make a run toward the $5,000 mark.
Bottom line
Ethereum’s two-week slide highlights the volatility that comes with institutional flows, liquidations, and macro uncertainty. But with $26 billion still locked in ETFs and strong technical support at $4,000, the long-term outlook may still favor the bulls if this crucial level holds.
