Ethereum Faces Pullback Risk as ETF Outflows Continue

Ethereum (ETH) has seen limited movement over the past week, confined to a tight trading range between $2,650 and $2,750. The absence of a significant catalyst has prevented any substantial upward momentum. Earlier expectations that a reduced likelihood of an October rate hike could propel ETH beyond its $2,800 resistance have not materialized. Instead, the crypto market appears to be taking a pause, with the latest rally losing steam.

Ethereum exchange-traded funds (ETFs) have experienced six consecutive days of net outflows, totaling $207 million over the past five days. This marks the longest streak of outflows since late June, suggesting that Wall Street investors are locking in profits following ETH's rise from $2,400 to $2,800 in late September. The prolonged outflows raise the possibility of a pullback to the $2,500, $2,400 range, although the upcoming Glamsterdam upgrade for the Ethereum blockchain could alter this outlook. The upgrade is scheduled for release in the fourth quarter of the year, with no specific date set.

On-chain metrics provide mixed signals. While trading volumes have declined, with the 7-day moving average making a bearish crossover with the 30-day moving average, the MVRV Ratio remains positive. This ratio has increased from 1.4% to 3.5%, indicating that the cost basis of all ETH tokens in circulation has decreased. This suggests that investors accumulated ETH at lower prices, anticipating further price appreciation.

Technical analysis shows ETH entering an accumulation phase over the past week, with multiple attempts to surpass $2,750 facing strong selling pressure. If selling persists and the $2,600 support level falters, ETH could quickly retest the $2,400, $2,500 buy zone. As long as this area holds, the rally remains intact. The Relative Strength Index (RSI) currently sits above 50, supporting a bullish outlook. The mid-term target for ETH remains $3,400, based on the size of the previous bull flag.