Key takeaways:
Declining spot buying and spot Ethereum ETF outflows signal weakening demand.
ETH price technicals show a possibility of a drop to $3,5000.
Ether’s (ETH) price has formed a series of lower highs and lower lows on the daily candle chart since reaching all-time highs of $4,950 on Aug. 14.
As the price fell, it flipped $4,500 into resistance, a level that has suppressed the altcoin for more than 10 days. Let’s look at what is capping Bitcoin at $4,500.
ETH/USD daily chart. Source: Cointelegraph/TradingView
ETH buyers are stepping back
Ether’s ability to push above the resistance at $4,500 appears limited due to the absence of buyers.
Its spot volume delta metric, an indicator that measures the net difference between buying and selling trade volumes, shows negative net spot buying on exchanges even as ETH price consolidates.
Related: Ethereum metrics are telling 2 very different stories right now
This suggests that price recovery may lack the momentum, potentially leading to continued consolidation or a deeper pullback.
Without real demand, any breakout attempt might lack the strength required to push ETH above key levels. So buyers must step in to continue the long-term uptrend.
Bitcoin’s post volume delta. Source: Glassnode
Demand for spot Ethereum ETFs has also been decreasing, with these investment products posting outflows every day last week, data from SoSoValue shows.
Friday alone saw Ether ETFs shed $446.8 million, bringing total flows last week to -$787.6 million. As such, ETH must find fresh buyers to break out of the current range back to $5,000.
Spot Ethereum ETF flows table. Source: SoSoValue
Decreasing Ether open interest
Decreased demand for leverage resulted in a sharp drop in Ether futures open interest (OI), which fell by 18% to $58 billion at the time of writing, from an all-time high of $70 billion on Aug. 23.
The open interest measures the total number of ETH futures contracts available on every derivatives exchange, including CME, Binance, Bybit and OKX.
ETH futures aggregate open interest, USD. Source: CoinGlass
Even though futures longs (buyers) and shorts (sellers) are always…
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