Ethereum Price Faces Crash Risk as Wall Street Dumps ETH

Key Insights

• Ethereum price is slowly forming an inverted cup-and-handle pattern.
• The total value locked (TVL) in its network has dropped to $43 billion.
• American investors have continued selling their spot ETH ETFs.

Ethereum price traded near $2,016 after extending its decline from May highs. The asset remained under pressure as exchange-traded fund flows weakened and several on-chain indicators showed slower network activity.

Although Ethereum continues to hold above major support levels, traders remain focused on whether broader market conditions improve enough to stabilize sentiment.

Ethereum Price Forms Inverted Cup-and-Handle Structure

The daily chart showed Ethereum retreating from approximately $2,470 reached earlier in May.

Price action has developed into a potential inverted cup-and-handle formation, a pattern technical analysts often associate with continued weakness if support levels fail.

The structure’s lower boundary sits near $1,763, which marked an important low earlier this year.

Based on the depth of the formation, some analysts identified lower technical objectives if Ethereum breaks beneath that support zone. However, technical patterns require confirmation before projected targets become relevant.

For now, Ethereum remains above both the $2,000 area and the lower boundary of the developing structure.

A sustained move below those levels would alter the current technical outlook, while stabilization above support could reduce immediate downside pressure.

Wall Street Investors are Dumping Their ETH ETFs

There are signs that American investors have started capitulating on Ethereum after a prolonged period of underperformance. Instead, they are rotating to other faster-growing areas. For example, memory stocks like Sandisk and Micron have all surged this year, and a recently launched ETF – DRAM – has already accumulated over $12 billion in assets since April this year.

Investors are also moving their cash to companies in the space industry like Rocket Lab, Planet Labs, and Intuitive Machines. Data shows that these stocks have all surged by triple digits, the NASA ETF has already gained over $1.5 billion in assets under management.

The stock market is also booming, with the blue-chip S&P 500 and Nasdaq 100 indices soaring to their record highs. These funds have continued to accumulate more inflows from investors in the past few months.

As such, whenever this happens, and when there are no hopes in sight, it is common for investors to rotate to the better-performing assets. In this case, they are rotating from spot Ethereum ETFs to the stock market, where they can receive better returns.

Data shows that spot Ethereum ETFs have now shed assets in the last three consecutive weeks. Their monthly outflows rose to over $540 million after they added $355 million in the previous month. In total, these funds have lost close to $1 billion this year.

Ethereum’s Fundamentals Have Worsened This year

The ongoing Ethereum price crash and ETF outflows is also happening because of its worsening fundamentals. A closer look at most metrics shows that it is not doing well.

For example, Artemis data shows that the amount of stablecoins in its platform has dropped by over 2% in the last 30 days. These stablecoins are worth about $165 billion. Worse, the amount of transfers has dropped by nearly 20% in the same period.

The same trend is happening in its RWA business, with the 30-day transfer falling by 32% to $14.4 billion. The distributed asset value in the network has dropped by 2.1% in the last 30 days to $16.7 billion.

Oyster Ethereum metrics have plunged, with the total value locked (TVL) in its decentralized finance (DeFi) ecosystem falling to just $40 billion. Most of this weakness was driven by AAVE, whose assets have dropped to $13.8 billion from a record high of $45 billion. This retreat accelerated after the recent KelpDAO hack.

The post Ethereum Price Faces Crash Risk as Wall Street Dumps ETH appeared first on The Market Periodical.