On December 20, Ethereum’s price continued its downtrend, dropping approximately 20% over the last four days. The current price is around $3,119, down roughly 15% in the last 24 hours.
Market Overview
The bearish performance of Ether on December 20 mirrored similar downside moves elsewhere in the crypto market. The total capitalization fell by approximately 9% to $3.21 trillion.
ETH/USD Daily Chart
Let’s examine the factors driving Ether’s price down today.
Futures Traders Turning Bearish
Futures traders have turned bearish, with the aggregated premium of futures positions becoming negative for the first time since November 6. This shift indicates a decrease in demand and an increase in selling pressure.
Ethereum Liquidation Chart
The recent drop triggered its largest liquidation since December 9, with over $299 million in positions being liquidated during the latest drop, $270 million of them longs. Such a high liquidation event can forcefully close long positions, resulting in a rapid, cascading price drop.
Ethereum ETF Flows Turn Negative Again
Investors’ de-risking behavior was also visible across spot Ethereum exchange-traded funds (ETFs), with significant outflows. After recording positive net flows for 18 consecutive days, data from SoSoValue shows US-based spot Ether ETFs recorded outflows totaling $60.47 million on December 19.
Ether ETF Flow Chart
Grayscale’s ETHE fund, which witnessed its first-ever net inflows on December 12, was the primary driver behind December 19 Ethereum ETF withdrawals with a total of $58.13 million outflows.
Profit-Taking Adds to Ether Price Headwinds
Ethereum’s downturn could also be attributed to profit-taking by early holders and short-term speculators following Ether’s run above $4,100. The Dormant Coins Circulation metric by Santiment reveals that short-term holders (STH) are partially responsible for the sell-pressure, as shown by the slight uptick in the circulation of Dormant Coins aged 90, 180, and 365 days.
ETH Dormant Coin Circulation (STH)
ETH Dormant Coin Circulation (STH)
Most of these STHs are selling at a loss, with realized losses crossing $60 million over the past 48 hours. One notable entity is the Ethereum Foundation, which sold approximately 100 ETH on December 17, according to data from Lookonchain.
Since then, the Ether’s price has dropped approximately 17%, ‘marking another successful top sale,’ Lookonchain said in a December 20 post on X, adding: ‘Over the past year, EthereumFoundation has sold 4,466 $ETH($12.6M) across 32 trades, with 15 of them executed at the top(marked in red in the table).’
Ether Price Confirms Double Top
Ether’s sell-off saw it lose the support provided by the $3,500 psychological level on December 19, data from Cointelegraph Markets Pro and TradingView shows. This decline validates a double-top pattern, which ETH price formed on the four-hour chart.
With the loss of the pattern’s neckline support at $3,500, ETH could extend the correction to $3,000. This target is obtained by measuring the height of the decline from the price top to its neckline.
ETH/USD Four-Hour Chart
On the other hand, the relative strength has crossed into the oversold region, indicating prices could soon see a relief bounce in the shorter term.
Conclusion
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
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