Ethereum ETFs See $20 Million Outflows as ETH Set for Continued Consolidation

Ethereum (ETH) experienced a drop of nearly 1% on Tuesday, signaling potential range-bound prices ahead due to its weak open interest. This trend aligns with the consecutive outflows recorded by Ethereum ETFs for the third day in a row, totaling $20.3 million in net outflows on Monday.

The data from IntoTheBlock reveals that despite the market’s struggle to recover from the early August crash, over 80% of Ethereum’s supply is currently in a profitable position. This indicates a significant portion of ETH holders are seeing gains, with Ethereum’s price hovering around $2,570. Such a high percentage of supply in profit post a price decline often suggests a period of consolidation in the asset’s price.

The Market Value to Realized Value (MVRV) Ratio further emphasizes the profitability of long-term holders (LTH) of ETH. The 30-day, 365-day, 2-year, and 3-year MVRV Ratios stand at -8.96%, -5.41%, 12.73%, and 6.67%, respectively. This data illustrates that despite the recent market downturn, long-term holders are on average in profit, while short-term holders are experiencing losses.

Looking at Ethereum’s technical analysis, the current price of around $2,600 reflects a 1% decline on Tuesday. Over the past 24 hours, ETH witnessed $23.8 million in liquidations, with long and short liquidations totaling $15.13 million and $8.68 million, respectively. Ethereum’s open interest stands at $10.69 billion, significantly lower than the record high of $17.09 billion reached on May 28. Open interest represents the total number of unsettled long and short positions in the market, indicating investor confidence and risk appetite.

The recent market correction has brought Ethereum’s open interest back to levels maintained from mid-April to mid-May, where prices consolidated within the $2,800 to $3,200 range. This suggests that Ethereum is likely to consolidate near its current levels until there is substantial growth in open interest. A breakthrough above the $2,800 price level could potentially support a bullish sentiment shift in the market.

In the short term, Ethereum could see a rise to $2,695, potentially triggering the liquidation of positions worth $40.84 million. While indicators like the Awesome Oscillator suggest a momentum reversal favoring a brief rise, the downward trend of the Relative Strength Index (RSI) below its moving average indicates a temporary bearish outlook. A daily close below the $2,111 support level could lead to a significant correction for ETH.