Ethereum's market is experiencing heightened volatility, driven by significant outflows from Ethereum exchange-traded funds, which saw a net withdrawal of $159 million on Wednesday. This marks the largest single-day outflow since July, contributing to a bearish market sentiment. The sell-off is further compounded by macroeconomic uncertainties, such as inflation and interest rate concerns, which have led to a broader decline in the cryptocurrency market. Additionally, Ethereum's breach of a crucial support level at $3,250 has triggered a bearish head-and-shoulders pattern, prompting traders to increase their short positions. The ETH long/short ratio of 0.884 reflects strong bearish sentiment, with technical analysis suggesting potential further declines if Ethereum closes below the $3,200 level.
The Volatility Shares Trust 2x Ether ETF (ETHU) has mirrored the underlying asset's decline, dropping 3.82% to $7.55 as of 4:00 PM on Thursday, January 9.