Ethereum Price Forecast: ETH struggles below $1,700 amid subdued on-chain users and capital outflows
- Ethereum builds momentum for a breakout, but supply at $1,700 weighs amid sustained capital outflows.
- Ethereum ETFs saw nearly $16 million in outflows on Thursday, aligning with broader risk-off sentiment in the derivatives market.
- Ethereum’s short-term recovery leans on steady momentum indicators with the MACD eyeing a buy signal.
Ethereum (ETH) rises, albeit gradually, toward $1,700 at the time of writing on Friday. The smart contract token reflects a marginal increase in buyers seeking to re-engage at lower price levels, following the massive drawdown from mid-May, which was largely driven by geopolitical tensions in the Middle East and macroeconomic uncertainty.
Ethereum on-chain participation drops as capital outflows persist
The number of addresses actively transacting by sending and receiving on the Ethereum protocol averaged 480,000 on Thursday, down from roughly 554,000, indicating a weaker breadth of on-chain activity. This decline is part of a broader cooldown, given that active addresses averaged 678,000 in late May and 738,000 on April 25.
If Ethereum steadies its rebound while active addresses soften, the divergence would suggest that momentum remains unconfirmed by on-chain demand, likely resulting in a sudden correction.
The derivatives market mirrors subdued on-chain demand, as reflected in the futures Open Interest (OI), holding at $22.98 billion on Friday, down from $24.40 billion on Monday and $30.95 billion on June 1. A persistent sell-off in derivatives indicates that investors are not convinced Ethereum can sustain its rebound and are unwilling to increase risk exposure.
Meanwhile, Ethereum spot Exchange-Traded Funds (ETFs) extended their bearish streak for the third consecutive day, with outflows totaling $16 million on Thursday.
SoSoValue data shows nearly $41 million in outflows on Tuesday and approximately $36 million on Wednesday, undermining risk appetite for related digital investment products. Cumulative inflows average $11.19 million while net assets stand at $9.24 million.
Price analysis: Ethereum upside capped by weak technicals
Ethereum trades at $1,688, keeping a bearish near-term bias as price holds well below the 50-day, 100-day and 200-day Exponential Moving Averages (EMAs) at $2,000, $2,148 and $2,405, respectively.
The Moving Average Convergence Divergence (MACD) histogram remains in negative territory on the daily chart, while the Relative Strength Index (RSI) hovers just above 30, hinting at lingering downside pressure despite the recent attempt to stabilize from oversold conditions.
On the topside, initial resistance is aligned with the 50-day EMA near $2,000, followed by the 100-day EMA around $2,148 and the more distant 200-day EMA close to $2,405, where sellers are likely to defend the broader downtrend. On the downside, the next notable structural support appears at the SuperTrend line near $1,849. Failure to reclaim the aforementioned EMAs would keep rallies limited and leave the pair vulnerable to renewed selling before any meaningful base can form.
(The technical analysis of this story was written with the help of an AI tool.)
Crypto ETF FAQs
An Exchange-Traded Fund (ETF) is an investment vehicle or an index that tracks the price of an underlying asset. ETFs can not only track a single asset, but a group of assets and sectors. For example, a Bitcoin ETF tracks Bitcoin’s price. ETF is a tool used by investors to gain exposure to a certain asset.
Yes. The first Bitcoin futures ETF in the US was approved by the US Securities & Exchange Commission in October 2021. A total of seven Bitcoin futures ETFs have been approved, with more than 20 still waiting for the regulator’s permission. The SEC says that the cryptocurrency industry is new and subject to manipulation, which is why it has been delaying crypto-related futures ETFs for the last few years.
Yes. The SEC approved in January 2024 the listing and trading of several Bitcoin spot Exchange-Traded Funds, opening the door to institutional capital and mainstream investors to trade the main crypto currency. The decision was hailed by the industry as a game changer.
The main advantage of crypto ETFs is the possibility of gaining exposure to a cryptocurrency without ownership, reducing the risk and cost of holding the asset. Other pros are a lower learning curve and higher security for investors since ETFs take charge of securing the underlying asset holdings. As for the main drawbacks, the main one is that as an investor you can’t have direct ownership of the asset, or, as they say in crypto, “not your keys, not your coins.” Other disadvantages are higher costs associated with holding crypto since ETFs charge fees for active management. Finally, even though investing in ETFs reduces the risk of holding an asset, price swings in the underlying cryptocurrency are likely to be reflected in the investment vehicle too.
Nothing in this material constitutes investment advice, personal recommendation, investment research, an offer, or a solicitation to buy or sell any financial instrument. The content has been prepared without consideration of your individual investment objectives, financial situation, or needs, and should not be treated as such.
Past performance is not a reliable indicator of future performance and/or results. Forward-looking scenarios or forecasts are not a guarantee of future performance. Actual results may differ materially from those anticipated.
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