Ethereum price: inverted cup & handle points to a crash amid ETF outflows

Ethereum ETH price stabilized a bit on Sunday, rising to $1,600 from the Saturday low of $1,512. It remains 34% from its highest point in May, and 67% below its all-time high. It has also formed an inverted cup-and-handle pattern, pointing to more downside.

Ethereum price technical analysis points to more downside

The daily chart shows that the ETH price has sunk in the past few months. As a result, it has remained below the 50-day Exponential Moving Average (EMA). It has also dropped below the important support level at $1,763, its lowest point in February this year.

A closer look shows that it has formed a rounded top pattern, a common bearish continuation signs in technical analysis. This rounded top is part of the inverted cup-and-handle pattern, which often leads to more downside. 

The ongoing rebound is happening after the coin formed a small doji candlestick pattern. A doji candle resembles a plus and is a common bullish reversal sign in technical analysis. 

Therefore, the most likely scenario is where the coin rebounds and retests the key resistance level at $1,763. This is known as a break-and-retest pattern, and usually confirms the downward trend. 

As such, these technicals suggest that the coin will drop further, potentially below the key support at $1,500. A drop below that level will point to more downside, potentially to $1,000.

ETH price chart | Source: TradingView

Ethereum ETF outflows continue

Data shows that American investors are dumping their ETH coins. Spot Ethereum ETFs shed over $168 million in assets this month, after losing $540 million in the previous one. These funds now have had a cumulative net inflow of $11.2 billion, with the net assets being $8.4 billion.

Spot Ethereum ETF inflows have had substantial outflows in the past few weeks as investors have moved to the stock market, which has done well this year. Despite Friday’s weakness, data show that the stock market has soared by double digits. 

Many investors have turned to the stock market because of the ongoing artificial intelligence and space boom ahead of key IPOs like SpaceX and OpenAI.

At the same time, there are concerns that the Ethereum network has weakened in the past few months. For example, the total value locked (TVL) in its ecosystem has dropped sharply in this period. It dropped to $40 billion, much lower than where it was a few months ago. 

At the same time, there are concerns that its network fees has continued falling. Ethereum made $39 million in fees last quarter, much lower than what other popular projects like Hyperliquid and Iran faded. Ethereum has also lost share to Hyperliquid, which has become the breakout star in the crypto industry.