Ethereum Price Forms Bearish Rounded Top as ETF Flows Decline: Cooling Momentum or Early Warning Signal?

Ethereum Faces Prolonged Downtrend Amid Weak Demand

Ethereum (ETH) has extended its multi-week decline, signaling growing caution across the broader crypto market prices. The world’s second-largest cryptocurrency has fallen roughly 29% since late October and remains about 41% below its year-to-date high, according to data from CoinMarketCap.

At press time, ETH was trading near $2,926, up about 2% in the past 24 hours after modest buying support emerged near short-term technical levels. Still, analysts say the relief rally does little to alter the prevailing bearish structure that has shaped up over the past month.

The current weakness follows a steep market-wide correction led by Bitcoin (BTC), which slipped below the $100,000 mark earlier this month. The pullback came after hawkish remarks from U.S. Federal Reserve Chair Jerome Powell, who reiterated that further rate cuts were not imminent despite easing inflation data. The comments triggered a flight from risk assets, dragging both equities and cryptocurrencies lower.

Sentiment indicators have mirrored the decline. The Crypto Fear and Greed Index fell into “Extreme Fear” territory by mid-November, marking one of its lowest readings since early 2024. Liquidations surged across major exchanges as leveraged traders rushed to exit positions, adding further pressure to ETH and other top altcoins.

ETF Outflows Highlight Cooling Institutional Interest

Another factor compounding Ethereum’s slide has been waning demand for spot-Ether exchange-traded funds (ETFs). Data from SoSoValue show that the nine U.S.-listed spot Ether ETFs have seen cumulative net outflows exceeding $2 billion since mid-October.

The reversal follows an initial burst of enthusiasm when the ETFs launched earlier this year, but institutional inflows have since tapered as global risk appetite weakened. Analysts say the sustained outflows suggest that ETF investors are taking profits or rotating into less volatile assets amid macro uncertainty.

“The temporary cooling of ETF flows has removed crypto’s key marginal bid, at the same time Treasury liquidity tightened,” notes a Delphi Digital commentary, a dynamic that along with weaker institutional demand appears linked to broader retracement across digital assets.

Still, not all players have been net sellers. Certain investment entities, including BitMine, have reportedly accumulated Ethereum in recent weeks, viewing the correction as a long-term opportunity to buy ethereum at discounted levels. However, these selective inflows have not yet reversed the broader downtrend in ETF and exchange data.

Technical Picture: Rounded Top Pattern Signals Caution

ETH loses momentum as bearish structure takes shape (Source: TradingView)

On the technical front, Ethereum’s daily chart shows what analysts describe as a multi-month rounded top formation, a gradual, dome-shaped curve that often signals the transition from bullish to bearish momentum. The pattern has developed since early October, as ETH failed multiple times to reclaim higher highs and gradually rolled over below $3,500.

The $2,750 zone now serves as a key inflection point. The level, which had acted as resistance earlier this year, briefly flipped into support last week after ETH’s minor rebound. But traders warn that if Ethereum loses this threshold again, the rounded-top structure could complete its formation, potentially accelerating a move toward the next major support around $2,230, roughly 24% below current prices.

Some analysts also highlight the risk of an inverse cup-and-handle setup forming if the recovery stalls, a view echoed on prediction platforms like CoinCodex, DigitalCoinPrice, and CryptoPredictions, where models often flag patterns that can extend bearish momentum and trigger deeper retracements before a bottom forms.

Comparisons are being drawn to Solana’s (SOL) chart earlier this year, where a similar rounded-top structure preceded a 49% decline from its September peak to $124. While chart patterns aren’t guarantees, the resemblance has led traders to stay cautious in the short term, closely tracking crypto market news for confirmation signals.

Market Context: Macro and On-Chain Pressures

Ethereum’s weakness is not isolated. Broader crypto markets have been weighed down by tighter liquidity, falling risk appetite, and declining speculative activity. Bitcoin’s inability to hold the $100,000 psychological level triggered ripple effects across altcoins, with XRP, SOL, and ADA all registering double-digit losses.

Macroeconomic developments remain a key overhang. Investors have interpreted Powell’s comments and recent U.S. labor data as evidence that the Federal Reserve may keep rates higher for longer. That stance has strengthened the dollar and reduced appetite for risk assets, including cryptocurrencies.

On-chain data also reflect cooling network activity. According to Glassnode, Ethereum’s total gas consumption has dipped nearly 12% since mid-October, while daily DeFi transactions and NFT volumes have contracted. Staking participation remains steady, but transaction fee revenue has declined, signaling reduced retail and speculative engagement.

Despite these headwinds, Ethereum’s underlying ecosystem remains active. The network continues to dominate decentralized finance (DeFi), accounting for over 55% of total value locked across blockchains. Developers are also preparing for the next upgrade aimed at reducing gas fees and improving throughput across Layer-2 solutions like Arbitrum, Base, and Optimism, offering opportunities for traders who swap crypto to rebalance exposure across chains.

Analysts Watch for Next Market Signals

With bearish sentiment dominant, traders and analysts are closely tracking several technical and macro indicators that could shape Ethereum’s next move:

• ETF Flows: A stabilization, or reversal, in outflows would indicate a recovery in institutional confidence.
  
• Key Price Levels: Holding above $2,750 would keep Ethereum in a consolidation phase; breaking below it could confirm the rounded top. completion.
  
• Macroeconomic Tone: Any dovish shift in Fed policy or easing in Treasury yields could spark renewed demand for risk assets.
  
• On-Chain Metrics: Sustained activity in staking, DeFi, and Layer-2 networks could offset some of the weakness seen in ETF data.

For now, Ethereum’s outlook remains tied to broader market sentiment. As long as global liquidity remains tight and institutional participation subdued, analysts caution that rallies may be limited to short-term relief moves.

Outlook: Short-Term Fragility, Long-Term Foundations Intact

In the short term, Ethereum appears vulnerable to further downside if current patterns hold. However, its long-term fundamentals, anchored by its dominance in smart contracts, staking economy, and institutional blockchain adoption, continue to provide a strong structural base.

Market observers note that pullbacks of this magnitude are not uncommon during mid-cycle consolidations. Layer-2 ecosystems, enterprise tokenization pilots, and ongoing development activity continue to strengthen Ethereum’s role as a foundational blockchain. For investors, that distinction may help sustain long-term conviction, even amid short-term volatility.

Conclusion

Ethereum’s recent price trajectory underscores the complex interplay between macro sentiment, ETF demand, and technical market structure. The emergence of a rounded top pattern, paired with declining ETF inflows, suggests weakening momentum that could test key support levels in the weeks ahead.

Yet the broader narrative is far from conclusive. If institutional flows recover or macro pressures ease, ETH could find renewed support near its long-term demand zones. Conversely, a breakdown below $2,750 would reinforce bearish technical signals and potentially extend losses toward the $2,200 range.

For now, Ethereum remains at a crossroads, its short-term trend fragile, but its long-term foundation intact. The coming weeks will determine whether the current weakness represents a temporary cooling phase or the early stages of a deeper correction.