Ethereum price forms death cross as ETF outflows extend into fourth month, will it crash?

Ethereum price has confirmed a dreaded death cross pattern on the weekly chart. Will it crash as demand for its ETFs continues to falter?

According to data from crypto.news, Ethereum (ETH) price has plummeted since mid-January this year. Trading around $2,000, which is a key psychological support level, the leading altcoin by market cap remains 40% below its yearly high.

The sharp downtick in price came amid massive liquidation events that have plagued the sector and a confluence of bearish headwinds coming from macroeconomic and geopolitical fronts.

As of now, Ethereum price remains at risk of prolonging the downtrend as traders remain precarious now that a highly bearish pattern has been validated. On the weekly chart, the 20-day exponential moving average has crossed below the 50-day one, forming what traders call a death cross.

Death crosses are one of the strongest signals of potential downtrend in the market, especially when supported by other bearish indications.

Recent ETH  price action has respected a descending parallel channel pattern, which had been forming since mid-August last year. Usually, as long as an asset’s price remains within the boundaries of the pattern, they tend to remain in a downtrend over the longer run.

Such a bearish outlook looks highly likely as the ETH price has fallen below the 23.6% Fibonacci retracement level at around the $2,200 support, making ETH prone to a drop towards its April 7 low of $1,380. This would mark a roughly 30% drop from current prices.

On the contrary, if bulls manage to drive ETH price back above the $2,200 mark, the bearish forecast will be invalidated.

Demand for Ethereum has also faded. Data from SoSoValue shows that the nine spot Ethereum ETFs have shed $278 million in outflows so far this month. 

While this figure still pales in comparison to the $1.42 billion bled during November, the cumulative monthly outflows since then totalled over $2.6 billion within the past four months.

Such consistent outflows tend to erode retail interest and remove a major safety net that has previously supported Ethereum price during periods of high volatility.