Ethereum (ETH) has extended its steep decline, reaching its lowest level since August 19 and sitting 33% below its September high. The cryptocurrency has now formed a death cross, a bearish pattern, as ETF outflows surge and futures open interest drops sharply.
The sell-off accelerated after the midterm elections, where Democrats won both the Senate and the House of Representatives, raising concerns about stricter regulation. Institutional investors appear to be losing confidence, as spot Ethereum ETFs have seen $764 million in outflows this month, following a $1.61 billion loss in October. Most of these outflows came from funds managed by BlackRock, Grayscale, and Fidelity.
The futures market is also showing signs of weakening demand, with open interest dropping to $23.3 billion on Saturday, down from a September high of $36 billion. This decline suggests that demand in the highly leveraged futures market is waning, leading to a surge in liquidations. Over $171 million in Ethereum positions were liquidated in the past 24 hours, adding to the downward pressure.
Ethereum’s fundamentals have also deteriorated, with network fees collected this year falling to $153 million, down from $523 million last year. The network made over $2.4 billion in fees in 2024. On the daily chart, ETH has slumped below the crucial support level of $2,000, which is both a psychological level and the 61.8% Fibonacci Retracement point. The death cross pattern, where the 50-day and 200-day Exponential Moving Averages (EMA) cross, suggests further downside risk, potentially pushing the token toward the $1,500 level.