Ethereum dropped to around $1,505 on June 6 before recovering to approximately $1,540, posting a weekly decline of about 23%. This downturn occurred amid broad weakness in the crypto market, driven by concentrated long liquidations, continued outflows from U.S. spot Ethereum ETFs, and a tightening macroeconomic environment, all of which pressured risk assets.
Long positions being closed amplify the downward trend.
Market selling pressure accelerated significantly after Bitcoin briefly dropped below $60,000. Derivatives data shows that approximately 78.7% of recent liquidations came from long positions, while Ethereum’s open interest declined by nearly 30%, indicating a rapid contraction of leveraged bullish bets.
This indicates that short-term capital is withdrawing, and price volatility is being driven more by passive liquidations than by new sell orders alone. As ETH breaks below multiple previous support levels, market sentiment has further weakened.
Continuous outflows from ETFs are weakening spot demand.
The funding situation has also not improved. According to SoSoValue data, U.S. spot Ethereum ETFs experienced net outflows of approximately $540 million in May and another $168 million in early June. Continuous redemptions have weakened a key source of buying pressure in the spot market.
In addition to ETFs, on-chain activity is also declining. The report notes that Ethereum network fees have dropped by approximately 45% from recent highs, some large holders continue to reduce their positions during this downturn, and speculative demand in DeFi and derivatives markets has also cooled.
Macroeconomic pressure and support levels below
Macro factors further suppressed risk appetite. Stronger-than-expected U.S. employment data weakened market expectations for Federal Reserve rate cuts; meanwhile, military tensions between the U.S. and Iran pushed oil prices higher, with Brent crude briefly approaching $97 per barrel, fueling inflation concerns.
Under this backdrop, some funds have shifted toward defensive assets and large-cap tech stocks rather than crypto assets. Polymarket data shows that traders recently estimated an 82.2% probability that the Fed will not cut rates for the remainder of 2026.
On the technical side, ETH has broken below the uptrend line that had previously served as support after multiple rebounds since February. According to the report, analysts note that $1,550 and $1,400 are currently key support levels; if $1,400 is breached, the $1,000 to $1,100 range may become the next significant historical demand zone.
According to the article’s estimates, if the downward trend continues, approximately $547 million in positions within the DeFi lending market could face liquidation, further amplifying selling pressure. On the sentiment front, the Crypto Fear & Greed Index has dropped to 11, falling into the “extreme fear” range.