Donald Trump's trade war tariffs are causing turbulence in the cryptocurrency markets this week, resulting in a drop in the value of Ethereum. Currently, the popular altcoin is exchanging hands at $2,347, a level not seen since November.
With the prices heading south, Ethereum investors are turning pessimistic, pulling their investments out of funds associated with the altcoin.
Outflows from Ethereum Spot ETFs have surged to a 30-day high, hitting $94.27 million on February 26, according to data from SosoValue. This marks the third-highest daily outflow this year, following Ethereum’s price slipping to an intraday low of $2,251.
On a notable Wednesday, Blackrock ETF ETHA recorded a significant net outflow of $69.76 million, bringing the total inflow since its listing to $4.33 billion. Similarly, Fidelity’s FETH saw a substantial net outflow of $18.38 million on the same day, totaling a cumulative inflow of $1.51 billion.
The continuous outflows from ETH ETFs signify a lack of confidence among investors or profit-taking behavior. The consistent removal of funds from these ETFs since February 21 indicates a bearish sentiment, further weighing on Ethereum's price.
Additionally, the decrease in open interest in ETH's futures market points towards a prevailing negative outlook across the board. The open interest stands at $20.58 billion currently, down by 20% since the start of the week, aligning with a 17% drop in ETH's price during the same period.
The drop in open interest as the price declines suggests traders are closing their positions rather than opening new ones, signaling diminishing market interest in Ethereum and potentially indicating a prolonged downturn in its value.
Breaking a key support level, Ethereum is now eyeing a potential yearly low of $2,150 as it trades below the lower boundary of its horizontal channel on the daily chart. This breach of a strong support level indicates the likelihood of further downside for ETH.
Nevertheless, if market sentiment improves and fresh demand enters the Ethereum market, it could propel the price to $2,467 and potentially break through to $2,585 as a resistance level.