Wall Street Begins Dumping Ethereum ETFs...Warning of $1,500 Collapse After $540 Million Outflow

▲ Ethereum (ETH), decline/AI generated image

Ethereum (ETH) is facing a double whammy of ETF sell-offs by Wall Street investors and a risky chart pattern, bringing warnings of further decline in June to the forefront of the market.

According to cryptocurrency media outlet Benzinga on May 31 (local time), Ethereum's price entered a bear market in May, falling from $2,470 to $2,000. Benzinga pointed out that as Wall Street investors continue to offload their Ethereum ETF holdings, the price is forming an inverse cup and handle pattern, increasing the likelihood of further decline in June.

US investors have been continuously selling Ethereum ETFs in recent months. Over $540 million flowed out of these funds in May, reversing all inflows from the previous month. Benzinga stated that the outflow of funds from Ethereum ETFs could signal that US investors anticipate price pressure for the time being, and some funds might be moving to better-performing assets such as stocks.

Ethereum ETFs increased their assets in only one month this year. Cumulative net inflows since launch amount to $11.37 billion, with iShares Ethereum Trust (ETHA) recording the largest share with $5.7 billion in assets. In contrast, funds are flocking to equity market-focused ETFs. Benzinga reported that the Vanguard S&P 500 ETF (VOO) is approaching a $1 trillion scale, attracting over $64 billion this year.

Network indicators also posed a burden. The total value locked (TVL) in the Ethereum ecosystem decreased from $95 billion last year to $42 billion. According to TokenTerminal, Ethereum generated $91.8 million in fees this year, but monthly fees showed a downward trend. During the same period, Tron (TRX) recorded $1.3 billion and Solana (SOL) recorded $116 million in fees.

Technical trends also leaned bearish. Benzinga explained that Ethereum is slowly approaching the bottom of an inverse cup and handle pattern, which often leads to further declines over time. Ethereum traded below its 50-day and 100-day exponential moving averages, and the Relative Strength Index (RSI) dropped from its year-high of 66 to 31. Benzinga analyzed that if downward pressure continues, the next key target is $1,763, the bottom of the cup, and if that line breaks, the possibility of a further decline to the psychological price level of $1,500 opens up.

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