Ethereum price drops to $4.2K following a retreat from recent highs near $4,770.
Multiple factors contribute to the decline including ETF outflows and institutional profit-taking activities. Let us breakdown some of the key reasons that caused the price drop.
Ethereum ETF Daily Outflows Spike Amid Institutional Selling
Ethereum ETF data from SoSo Value shows massive outflows during recent trading sessions, with August 18 recording $196.62 Million in net exits.
Earlier, August 15 posted $59.24 Million in withdrawals, while August 14 saw $639.36 Million leaving funds.
These consecutive outflow days are going hand-in-hand with Ethereum price weakness from recent highs.
Daily ETF performance shows that some positive inflow days offset larger outflows. August 13 recorded $799.14 Million in inflows, while August 12 added $523.92 Million to fund balances.
August 11 brought $1.02 Billion, and August 8 contributed $461.21 Million in positive flows.
Weekly ETF patterns show volatility in institutional demand, with the week ending August 18 showing $196.62 Million in outflows.
The week ending August 15 posted $547.82 Million in inflows, the week ending August 8 added $326.83 Million. The August 1 week recorded $154.32 Million in positive flows before the recent decline.
Cumulative ETF holdings peaked around $12.47 Billion before dropping to current levels during the selloff.
Weekly data shows July with massive inflows, including July 25 at $1.85 Billion and July 18 with $2.18 Billion. July 11 contributed $907.99 Million and July 3 added $219.19 Million to total holdings.
Institution Offloads 5,000 Ethereum for $21.56 Million Profit
As per Lookonchain data, Longling Capital sold another 5,000 ETH worth $21.56 Million during recent trading sessions to secure profits from the market rally.
The institutional player has built a reputation for successful swing trading by buying low and selling high across market cycles.
The institution’s two-year trading history shows impressive returns through strategic positioning and timing.
Longling Capital withdrew 123,405 ETH worth $290 Million from Binance at an average price of $2,349 during accumulation phases. They later deposited 70,800 ETH worth $248 Million back to the exchange at an average price of $3,502.
This trading strategy generated $184 Million profit over the two-year period through disciplined buy-low, sell-high execution.
Analyst Ted identifies additional selling pressure from Binance operations aimed at liquidating leveraged long positions.
The largest leveraged short position on ETH ever recorded currently exists according to Ted’s analysis.
If Ethereum rallies from current levels, these bearish positions would also face severe losses.
Ethereum Price at $3,900 Presents Accumulation Opportunity
According to Lau, this level serves as the final accumulation zone before Ethereum reclaims $4,800 and pushes toward all-time highs.
Michaël van de Poppe also put out his analysis and identified the first bounce area as having been reached with ETH returning to the 20-EMA region.
Volatility should slow down from current levels creating conditions for strong altcoin breakouts. The technical chart shows areas to buy for bounces with bottom region at 70% chance according to the analysis.
Glassnode data reveals strong investor engagement during the pullback from $4,700 levels.
Accumulation around $4,400 also helped stabilize downside pressure with part of that supply quickly redistributed higher.
This level has repeatedly acted as resistance in prior cycles. This means that the current pullback provides healthier entry points below this resistance zone.
All these reasons alongside the overall market slump caused Ethereum price to pull back from its recent high.
