Ethereum Price Drops to $4,000, ETF Outflows Hit Record $795 Million

Ethereum’s rally has hit a stumbling block, with the cryptocurrency posting two straight weeks of losses and slipping back to a critical support zone. The downturn comes as institutional demand cools and exchange-traded fund (ETF) outflows climb to historic highs.

ETF Outflows Weigh on ETH Price

At the time of writing, Ethereum (ETH) was trading near the $4,000 support level — a sharp pullback from its year-to-date peak of $4,920. Despite the drop, ETH remains up more than 190% compared to its April low of $1,377.

The latest decline coincided with a surge in ETF redemptions. U.S.-listed Ethereum ETFs shed a record $795 million this week, surpassing the previous high of $787 million recorded in early September. This marks a sharp reversal from the inflows of $556 million and $637 million logged in the prior two weeks. Analysts suggest this shift signals fading momentum among American institutional investors, who had been a major driver of Ethereum’s recent rally.

Currently, Ethereum funds hold around $26 billion in assets, representing approximately 5.37% of the total ETH supply.

Liquidations Add Selling Pressure

Beyond ETF flows, the market also faced a wave of forced selling. Roughly $1.5 billion in leveraged long positions were liquidated across major exchanges such as Binance and OKX during the week. These liquidations accelerated Ethereum’s decline, as exchanges closed bullish bets when the price began to slide. Historically, large-scale liquidations often trigger further price drops as traders rush to cover positions.

Macro Headwinds Intensify

Broader economic factors also contributed to Ethereum’s selloff. Uncertainty over U.S. Federal Reserve policy is rattling risk assets, with investors questioning whether the central bank will continue to cut interest rates in the face of stubborn inflation.

A new report this week showed personal consumption expenditure (PCE), the Fed’s preferred inflation gauge, edging further away from the 2% target. Persistently high inflation could slow or halt the Fed’s rate-cutting cycle, reducing liquidity in financial markets and dampening demand for risk-sensitive assets like cryptocurrencies.

ETH Technical Outlook

From a technical perspective, Ethereum’s weekly chart shows a retracement from the 2025 high of $4,918 down to a low of $3,825. Encouragingly, ETH has formed a break-and-retest pattern around the $4,000 level — an area that also acted as a resistance point in March, May, and November of last year. Such a setup is often seen as a bullish continuation signal.

The cryptocurrency also continues to trade above its 50-week and 100-week Exponential Moving Averages (EMAs), both of which provide additional support. As long as Ethereum stays above $4,000, analysts believe the broader uptrend remains intact. A successful defense of this level could set the stage for a retest of the all-time high and potentially a move toward the $5,000 milestone.