Ethereum price risky pattern nears as supply on exchanges plunge

Ethereum price crashed to an important support level as its open interest slipped and exchange-traded funds outflows accelerated. 

Ethereum supply on exchanges has dropped

Ethereum (ETH) token dived to the key support at $3,060, down by 35% from its highest point this year. It has moved to the lowest level since July 16 as the crypto bear market accelerates.

ETH price has slumped as American investors continued to exit their positions. Data compiled by SoSoValue shows that spot Ethereum ETFs have been bleeding assets in the past few weeks. 

These ETFs have shed assets in the last six consecutive days, bringing the cumulative inflows to about $13 billion. They have lost assets in the last two straight weeks, bringing the total assets to $20 billion. 

The ongoing Ethereum price crash is due to the ongoing decline in its futures open interest. Data shows that the interest has dropped by over 50% since October, a sign of waning demand. It has also dropped as the Crypto Fear and Greed Index eases.

Still, there is a ray of light despite the ongoing Ethereum woes. Data compiled by CoinGlass shows that the amount of ETH tokens on exchanges has been in a strong downtrend. There are now 11.96 million tokens in exchanges, down from the July high of 16.36 million. 

Falling exchange balances is a bullish aspect as it signals that investors are moving their tokens to self-custody. It also means that the selling pressure is not all that significant. 

Ethereum price technical analysis 

The daily chart shows that the ETH price has been in a strong bearish trend in the past few months. This crash started as it formed a double-top pattern, a popular bearish sign in technical analysis. 

The coin has bottomed at the 50% Fibonacci Retracement level. It has moved below the 50-day and 200-day Exponential Moving Averages. The two averages are about to cross each other, in a process known as a death cross. Ethereum price remains below the Supertrend indicator. 

On the positive side, the coin has formed a small double-bottom pattern at $3,060 and a neckline at the 38.2% retracement at $3,600. It has also bottomed at the strong, pivot, and reverse of the Murrey Math Lines. 

Therefore, there is a slim chance that the token will rebound it holds the double-bottom at $3,060. A move below the double-bottom will point to more downside.